You ended up with a rejected loan application, didn’t you? Now what? Millions of business owners or entrepreneurs trying to get access to working capital reveal that there’re only a few lenders that’re ready to work with their type of business. What are the reasons? How can you improve your chances? Maybe alternative small business loans? Let’s move forward to see.
Business Loan Rejected?
According to Dun & Bradstreet and Pepperdine Graziadio Business School:
- Less than 1/3 of small business owners were able to obtain funding from a bank in Q2 2019, which was a decrease from 44% in Q1 2019.
- Over half of business owners note their growth is hindered by not being able to obtain a bank loan.
- 47% say the inability to get access to working capital stops them from enlarging their staff.
There’s more than one factor that can make it rather challenging or even impossible for you to get approved for a business loan.
Try Alternative Small Business Loans
The mentioned challenges are especially true of traditional loans. They may include the state of your business, the reason why you need funding, the type of your industry, your ability to pay back, etc.
If you can’t get approved for business funding, you should take action. Specifically:
- Explore the reason(s) why you were rejected. By the way, crowdsourcing and family/friends can sometimes be the best helping hand.
- Extend the time you’ve been in business.
- Since a limited credit history is a real impediment, be cautious and particular about the digital sources of money you’re dealing with.
- Have a healthier cash flow: the lender wants to be sure he/she can reap a return on his\her risky investment.
- Turn to a trustworthy alternative online lender that’s dedicated to offering alternative small business loans to your type of business. By the way, a merchant cash advance (MCA) from a reputable alternative lender is the easiest option: only, the rates are higher.
- Be clear on your costs. Be prepared to pay higher rates.
- Improve your business (or personal) credit score.
To sum up, the issues of how hard it is to obtain a business loan depends on certain factors. Study those factors, improve your chances and choose the right lender for your own business needs.
Author Bio: Michael Hollis is a Detroit native who now lives in Los Angeles. He is an account executive who has helped hundreds of business owners with their alternative small business loans solutions. He’s experimented with various occupations: computer programming, dog-training, scientificating… But his favorite job is the one he’s now doing full time — providing business funding for hard working business owners across the country.