When you are just starting out as a small business owner, you are bound to run into some financial struggles on occasion. Thankfully, if you have been in business long enough to be able to show a record or proof of your profits, you may be able to qualify for a business capital loan, often times called a working capital loan, with some lenders. While these loans can be incredibly convenient, they can also lead you to make some pretty big financial mistakes for your place of business. To ensure you get the most from your business capital loan experience, it is best to avoid the following mistakes. 

Mistake: Not being honest about profits in order to get a larger business capital loan. 

Why? Working capital loans are provided by lenders based on what your current profit margins are as a small business owner. In order to determine your eligibility amounts, you will be asked to provide documentation to show your typical profits from a month-to-month sales report. If you are not forthcoming with how much your profit margin really is, you could be offered larger sums of money, but this larger amount can be harder to pay off and involve higher interest rates. 

Mistake: Neglecting to make payments on your business capital loan in a timely manner. 

Why? Even though you can get a capital loan without a credit check, this does not mean you can get neglectful about being responsible with your payments. Working capital loans can be a huge advantage as a small business owner and they are usually reserved for business owners with an upstanding reputation with a lender. If you ruin that reputation by not making timely payments, you can affect your ability to get loans down the road, both business capital loans and traditional loans. 

Mistake: Not considering the effect of your payments on your current profits before accepting a loan. 

Why? Business capital loans are set up much like traditional loans but have different qualification stipulations. Therefore, whatever you borrow, will have to be paid back within a certain time frame. Furthermore, business capital loans are rarely ever a loan product that you can refinance or add additional funding to. So before you take out a loan, make sure you will be able to afford the payments without cutting so much into your business profits that you end up in an even worse financial state down the road.