Contents1 What’s the challenge of getting a small business loan from the bank?2 Rejected for a Bank Loan? 5 Quick Fixes3 How to deal with business loan rejections What’s the challenge of getting a small business loan from the bank? Let us look at it this way. You and I both know that your business is worth the risk for you, right? BUT, is it worth the risk for the bank? That’s the $64,000 question. And to answer that we have to look at how your business ranks relative to all the businesses that do what you do and then how does that stack up against all the other businesses that are looking for business loans. And then you have to see if your bank likes your business and the industry. It’s enough to make your head spin. Are you a start-up? No revenue? No worries? Odds are your bank has no interest. Been in business for 3 years? Making money? No worries? Just because you do it right doesn’t mean a traditional bank is going to pat you on the back and offer you a small business loan. In fact, the pat on your back or the one you feel on your fanny as you walk out of the bank may just be them giving you the proverbial boot… How about if we take a look at using your assets or collateral? Why not use those assets as collateral for obtaining funding? Just a thought. You never know, it just might open up some interesting avenues. Here’s the deal. There are small business loan funding programs based on the revenue that can be pledged as collateral. Why not use it? Using it to leverage your finances for business purposes may just be the ticket to some working capital or that small business loan you desire. Plus it may accelerate the business growth. Now while I’ve been railing against using personal credit for business purposes and stressing that you must separate the two, the reality is that your personal credit does play a critical role in your ability to secure a business loan. All I’m suggesting is that you can take advantage of a good personal credit score. In the world of getting approved for a business loan, your personal score can make the difference. Here’s the truth. Most lenders won’t or don’t like to talk about this. OK, so what’s the score? 7-2-0. That “FICO” line hasn’t moved at all over the past 10 years or so. Maybe a little lower maybe not. I could talk for another hour or two just on this subject but I’ll spare you. Just remember that improving both personal and business scores will make much more money available to you and you’ll get business loans with better rates and better terms. These may be secured small business loans or even unsecured business loans. You can always visit Sunwise Capital and we can help you through these muddy waters and get you the business loan you need today. Bear in mind that there are pros and cons to applying. They may or may not report to business and or to your personal credit bureaus. 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 https://sunwisecapital.com.