After You’ve Been Rejected for a Business Bank Loan
27% of businesses surveyed by the NSBA (National Small Business Association) reported that they weren’t able to receive the funding they needed. For those 1-in-4 businesses, the lack of funding prevented them from growing their business. This is especially true of women- and minority-owned businesses.
Even if you’ve received a business bank loan denial, this isn’t the end of the world, and the loan process doesn’t end there. You just need to understand how often banks tend to reject small business loan applications, the reason for such denial, and find out alternative ways to get the necessary funds for your business.
It’s important to note that according to Biz2Credit’s Small Business Lending Index, in March 2016, big banks approved 23% of funding requests, institutional lenders approved 62.8%, small banks approved 48.7%, alternative lenders approved 60.7%, and credit unions approved 42% of loan applications.
Merchants interested in alternative business funding should consider turning to First American Merchant, a reputable business loan provider and high risk payment processor that boasts an A+ rating with the BBB. FAM is an award-winning alternative online lender that offers exceptional business funding opportunities and the lowest possible rates to merchants of any type.
Banks aren’t willing to provide money to small businesses because they don’t find them to be reliable. Banks don’t reject bigger businesses because they don’t consider them risky since larger businesses and their owners have assets.
To increase your chances of getting approved for a bank business loan, you should have a high personal credit score, be able to repay the loan plus accrued interest, as well as have at least one source of collateral.
That’s why small businesses are now more and more often relying on alternative lenders to supply them money. Alternative lenders are more flexible as compared to banks, and are much more likely to approve small business owners for loans.
Thanks to the flexible nature of most alternative lenders, you can pay back your loan in as little as 7 days without penalty, or over the course of 6 months. Alternative lenders help small businesses take their business to the next level and increase revenue. They allow small business to become financially independent again.
As you see, business bank loan rejection is something you can overcome without major challenges. You just need to understand the situation and choose an alternative business funding option that works best for you.