How Social Media Can Hurt Your Chances of Getting a Small Business Loan
People around the globe are literally obsessed with social media. An average adult accesses their accounts a couple of times each day. Based on research carried out in 2016, Facebook is the most popular channel with 1.79 billion users. The visual social networks such as Instagram and Snapchat are slowly and steadily becoming the most interactive platforms where people share pictures on different aspects of life.
Small businesses are also on board. Facebook, Twitter, and LinkedIn are rated as the top social channels where clients connect with their favorite brands. While social media could be an effective way to market your business and engage with your customers, could it minimize your opportunities of getting a small business loan?
Social Media Activity as Credibility
Regardless of the time, your business has been in operation, a lender’s decision on lending you money can be influenced by a strong presence in social media. Financial organizations today carry out their research online. Your company’s vigilance on social media is one of the things they check. Lack of active social networking is an indication of inadequate marketing to consumers which is not good for your business.
Too Risky and Personal
What kind of content does your small business share with your consumers? This could hurt the chances of acquiring small business loans. Regular complaints, negative content, and information that is too personal on the social feeds reflect trouble. Watch out for any associations with your small business account that could turn off a lender.
Bad Credit or Negative Reputation
Things can get tougher than expected in the business world especially in the recent recession. Many small business owners are improving credit scores and rebuilding their business. Social networks reflect the bad times and could paint a negative image on the small business owners. Lenders dig into the history of potential lenders. It is important to straighten up any negative credit references from your social media archives.
Social Ratings Included in Algorithms for Credit
Over the years, modern-day small business lenders are turning to social media ratings as determiners of creditworthiness. The value of a company is indicated by actual algorithms. They look out for particular signs of the company’s progress, through an increase in followers and frequency of social content sharing. Be sure to have a strong social media presence prior to a small business loan application.
Vendor Relationships Linked to Social Media
The vendors your brand does business with is also a determining factor of your creditworthiness. This could be your merchant account vendors or affiliates. Some vendors have a reputation for working with business owners with bad credit. To be safe, ensure your business has a blend of vendor relationships at all levels of financial needs and credit scores.
If you are viewed as the leading mind or trendsetter in your niche, you may increase the probability of attracting a reputable lender. Publishing a book, starting a podcast or blog or becoming a public speaker are some ways of elevating your status. Share this on your social media accounts. The aim is to come off as someone with remarkable professional value as well as an influencer.
Most people think they can do and say anything they want on social media. Be keen to share relevant content on your social media if you want to get a small business loan. Stay away from offensive, scandal-worthy, and controversial imagery and content. Avoid any photos that may make you come across as undisciplined or as a party animal. Lending farms and banks could still be old-fashioned, so portray a professional image.
What does your LinkedIn past history reflect? Look at your profile from your potential lender’s perspective. Make your profile to look stable and focused on achieving a certain goal. Eliminate information that showcases frequent changes in interests or industries and any unwanted material. This will avoid awkward questions in the process of getting a small business loan.
Social networking usage for business is predicted to rise in the coming years. Social media can work in favor of your small business if used properly. Go through all your accounts on various channels and ensure everything displayed will help your business grow.