Let’s set the record straight: borrowing money to grow your business isn’t a sign of failure. It’s a strategic move. The world’s most successful businesses — from your favourite café chain to the tech giants we all marvel at — have all used external funding at some point. Access to flexible working capital is often what separates stagnation from scale. But there are still plenty of myths holding South African business owners back.

In the interest of truth and transparency, let’s unseat eight great business funding myths today, shall we?

Compare Business Funding here.

Myth 1: “If I need funding, I must be failing”

Wrong. Needing capital doesn’t mean you’ve messed up. It often means you’re ready to grow. Whether you want to hire more staff, upgrade equipment, restock inventory, or open a new location, those things take capital. Smart business owners know how to see a cash advance as a tool, rather than a money trap.

At Merchant Capital, we fund ambition. And we do it without judgment, red tape, or the bureaucracy you’d expect from a traditional lender.

Explore: Alternative Business Loans

Myth 2: “Only banks offer ‘real’ funding”

Banks have their place. But they’re not the only option and, depending on your business, often not the best. Banks have a few more “i”s to dot and “t”s to cross than us, and are quite risk-averse.

Not to blow our own horn too much — but as the winner of the Best Small Business Funder award, you get a faster, more flexible way to fund your business dreams. Our funding is unsecured, which means no need to tie up your assets. You get access to the cash you need, when you need it, and you repay it at a pace that suits your business.

Can I afford this? Try our calculator and find out.

Myth 3: “You need collateral to get a business loan”

Most business loans require you to give collateral — an asset like equipment, property, cars or stock — which can be taken and sold if you fail to make payments.
Not with us.

We understand that even the best businesses go through tough times. We’re here to support you through those cycles, not take the very assets you need to run your business from you.

Myth 4: “Grants are better than loans”

In theory, yes. Free money sounds great. But government grants are notoriously difficult to secure, come with tight restrictions, and take forever to arrive. If you need capital now to grab a time-sensitive opportunity, waiting for a grant isn’t practical.

Our funding can land in your account in as little as 48 hours. And you choose how to use it. No restrictions, no hoops to jump through.

Myth 5: “Borrowing means giving up control”

This one confuses loans with investment. Taking on an investor means handing over equity and often, decision-making power.

Borrowing from us? You stay in full control. No board seats. No interference. Just working capital to move you forward.

Related: Why more business owners skip the bank

Myth 6: “Repayments are rigid and stressful”

Traditional loans can feel that way. But we do things differently. Our repayments are designed to flex with your business turnover. When you’re quieter, you pay back less. When you’re busy, you pay back more. It’s simple, manageable, and designed to support your cash flow.

Myth 7: “Debt is dangerous”

Uncontrolled debt is. Strategic funding isn’t. The key is to borrow with a purpose. Use funding to generate more income than it costs you. That’s how you build momentum. And that’s what we help our clients do every day.

Interesting: SME Insights: Unlocking a new era for growth and innovation

Myth 8: “An overdraft is enough”

Overdrafts are often the first port of call for business owners. Open up a business account, and three minutes later the bank is calling with an overdraft offer. That’s great, and an overdraft has its uses, but they’re not built for growth.

Overdrafts are designed for short-term cash flow gaps, not long-term growth goals. And while convenient, overdrafts can come with high interest rates, limited access, and no flexibility when your needs change.

We offer something better: funding that’s tailored to your business needs. You get a fixed amount, a clear repayment plan, and the freedom to use it for whatever drives your business forward — whether that’s expanding your team, investing in marketing, or stocking up ahead of peak season.

It’s Time to Talk Real Business Funding. No Myths. No Mystery.

Funding isn’t something to fear or feel ashamed about. It’s a tool, just like your POS system, your delivery van, or your website. And if it helps you take your business to the next level, it’s a tool worth using.

At Merchant Capital, we’re here to partner with you, not just lend to you. We’ve supported thousands of South African SMEs with quick, flexible, and asset-free funding solutions designed to match the rhythm of your business.

Let’s Talk

‍Need funding to seize your next opportunity?
Get in touch — we’ll call you back. Let’s make it happen.

FAQs

Why don’t banks lend to small businesses?‍

Banks often see small businesses as high risk. Their lending criteria are strict, the process is slow, and they typically require collateral or a long credit history. At Merchant Capital, we do things differently. Our funding is asset-free, fast, and built around your business needs. Enquire now to see how we can help.

Where to get business funding in South Africa?‍

You’ve got options, from traditional banks and government grants to private investors. But if you’re looking for fast, flexible, and asset-free funding tailored to SMEs, Merchant Capital is a trusted partner for thousands of South African business owners. Reach out to us today and let’s talk about your funding needs.

What is the best source of funding for small businesses?‍

The best funding gives you quick access to capital, doesn’t demand assets, and flexes with your cash flow. That’s exactly what we offer at Merchant Capital. Let us help you grow your business on your terms. Enquire today.

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