Rejected for a Bank Loan? 5 Quick Fixes
Excellent recommendations for any business owner looking to secure a small business loan. I do have challenges with recommendation #5. Shopping banks for the best business loan is OK. Here are the real challenges with this strategy.
First, every bank is going to tell you that they can offer you a business loan. They simply want your business. Don’t expect a bank to be very scrupulous. New accounts are the lifeblood of any bank branch so expect nothing but a positive response to your question.
Also, be very cautious about the switch strictly because the new bank encourages you to make that switch. Remember the grass is always greener on the other side. My suggestion is to get the bank to give you a pre-approval based on a loan application actually submitted. You need to know before you make the switch.
Lastly, most lenders want to see banking stability. If you’re pressed for time, making a switch to a new bank can actually be detrimental to securing that additional working capital. In fact, other lenders are going to want to see at least 3 months bank statements from your new bank to ensure that you’re not bank hopping.
How to deal with business loan rejections
Rejected for a loan? Here’s what you should do Updated: By Rebecca Wessell, Business strategy, ValuePenguin As most seasoned small business owners know, getting financing can be difficult. This is mainly because banks view small businesses as risky to lend to because of their high failure rates. But while banks may be selective in who they lend to, many small business owners get rejected for reasons that are either completely fixable or avoidable.
So in conclusion, be cautious when it comes time to switch banks. Yes, make sure you have all your ducks lined up before you go through the application process. Make sure your financials are up to date if you’re looking to secure larger loan amounts (over $100,000 with alternative lenders like Sunwise Capital. Generally, under that amount does not require financials.
Work at improving your personal as well as business credit scores. Remember that a top alternative lender can generally work with you even if your personal credit score or FICO is in the 500’s.
Lastly, by all means, make sure you try to improve your cash flow.
However, it just might be your cash flow that could use an injection of cash by way of a small business loan or additional working capital to lift your business to new heights. Let us know if we can help at http://sunwisecapital.com.
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