Did you apply for a small business loan and got rejected? There are a number of reasons for this. According to a 2015 small business survey, of those who were denied financing, 45% had been rejected more than once, and 23% didn’t know the reason their applications were denied.
It’s important to note that if you have difficulty getting approved for a small business loan, you should find a reputable business loan provider like First American Merchant to turn to. FAM offers alternative small business loans to merchants of any type. First American Merchant is an award-winning alternative online lender and high risk payment processor that boasts an A+ rating with the BBB.
So why might your application for a small business loan be denied? You can find the reasons below:
- Bad Credit or No Credit
As a rule, banks take into account both personal and business credit scores when making their lending decisions and determining interest rates. Low credit scores can be the result of bankruptcy, late or missed payments to lenders, credit card issuers and vendors. As for no credit, businesses that are new may have no credit history at all.
- Not Understanding Your Credit Score
One of the main reasons why you may be refused has to do with the failure to understand your credit score. 45% of entrepreneurs having participated in a survey didn’t know they had a business credit score. 72% weren’t aware where to find information concerning their credit score.
- Lack of Collateral
Often, you’ll be required to provide collateral. If you don’t have equipment or real estate to offer as collateral. On the other hand, maybe you just don’t want to use your personal assets as collateral.
- Inadequate Cash Flow
You must show your lender you’re able to repay your loan on a monthly basis in addition to covering rent, payroll, inventory and other costs.
- Not Being Prepared Enough
When applying for a small business loan, you should be well prepared. Have a solid business plan prepared to show your lender. Otherwise, the lender won’t consider your application. Apart from a business plan, you should also have financial statements or projections, personal and business credit reports, tax returns and bank statements.
- Applying for a Small Loan from a Bank
Most small businesses are looking for loans that are less than $100.000. For banks, this is a small amount that isn’t profitable for them.
- You Have Too Much Debt
If you have already accumulated debt from other loans or lines of credit, the lender will probably reject your application. It’s important to pay down your loans and keep your balance low.
- Your Reasons for Seeking a Loan Aren’t Serious
Why do you need a loan? The lender won’t issue you a loan if your reasonsdon’t make sense. You should show the loan will be used to grow your business so that you can pay the lender back.
When considering a small business loan, take into account all the above-mentioned points so to be sure you’ll get approved for the loan without challenges. Take the time to research all your options and choose the best for your business wants and needs.
Did you apply for a small business loan and got rejected? There are a number of reasons for this. According to a 2015 small business survey, of those who were denied financing, 45% had been rejected more than once, and 23% didn’t know the reason their applications were denied.
It’s important to note that if you have difficulty getting approved for a small business loan, you should find a reputable business loan provider like First American Merchant to turn to. FAM offers alternative small business loans to merchants of any type. First American Merchant is an award-winning alternative online lender and high risk payment processor that boasts an A+ rating with the BBB.
So why might your application for a small business loan be denied? You can find the reasons below:
- Bad Credit or No Credit
As a rule, banks take into account both personal and business credit scores when making their lending decisions and determining interest rates. Low credit scores can be the result of bankruptcy, late or missed payments to lenders, credit card issuers and vendors. As for no credit, businesses that are new may have no credit history at all.
- Not Understanding Your Credit Score
One of the main reasons why you may be refused has to do with the failure to understand your credit score. 45% of entrepreneurs having participated in a survey didn’t know they had a business credit score. 72% weren’t aware where to find information concerning their credit score.
- Lack of Collateral
Often, you’ll be required to provide collateral. If you don’t have equipment or real estate to offer as collateral. On the other hand, maybe you just don’t want to use your personal assets as collateral.
- Inadequate Cash Flow
You must show your lender you’re able to repay your loan on a monthly basis in addition to covering rent, payroll, inventory and other costs.
- Not Being Prepared Enough
When applying for a small business loan, you should be well prepared. Have a solid business plan prepared to show your lender. Otherwise, the lender won’t consider your application. Apart from a business plan, you should also have financial statements or projections, personal and business credit reports, tax returns and bank statements.
- Applying for a Small Loan from a Bank
Most small businesses are looking for loans that are less than $100.000. For banks, this is a small amount that isn’t profitable for them.
- You Have Too Much Debt
If you have already accumulated debt from other loans or lines of credit, the lender will probably reject your application. It’s important to pay down your loans and keep your balance low.
- Your Reasons for Seeking a Loan Aren’t Serious
Why do you need a loan? The lender won’t issue you a loan if your reasonsdon’t make sense. You should show the loan will be used to grow your business so that you can pay the lender back.
Did you apply for a small business loan and got rejected? There are a number of reasons for this. According to a 2015 small business survey, of those who were denied financing, 45% had been rejected more than once, and 23% didn’t know the reason their applications were denied.
It’s important to note that if you have difficulty getting approved for a small business loan, you should find a reputable business loan provider like First American Merchant to turn to. FAM offers alternative small business loans to merchants of any type. First American Merchant is an award-winning alternative online lender and high risk payment processor that boasts an A+ rating with the BBB.
So why might your application for a small business loan be denied? You can find the reasons below:
- Bad Credit or No Credit
As a rule, banks take into account both personal and business credit scores when making their lending decisions and determining interest rates. Low credit scores can be the result of bankruptcy, late or missed payments to lenders, credit card issuers and vendors. As for no credit, businesses that are new may have no credit history at all.
- Not Understanding Your Credit Score
One of the main reasons why you may be refused has to do with the failure to understand your credit score. 45% of entrepreneurs having participated in a survey didn’t know they had a business credit score. 72% weren’t aware where to find information concerning their credit score.
- Lack of Collateral
Often, you’ll be required to provide collateral. If you don’t have equipment or real estate to offer as collateral. On the other hand, maybe you just don’t want to use your personal assets as collateral.
- Inadequate Cash Flow
You must show your lender you’re able to repay your loan on a monthly basis in addition to covering rent, payroll, inventory and other costs.
- Not Being Prepared Enough
When applying for a small business loan, you should be well prepared. Have a solid business plan prepared to show your lender. Otherwise, the lender won’t consider your application. Apart from a business plan, you should also have financial statements or projections, personal and business credit reports, tax returns and bank statements.
- Applying for a Small Loan from a Bank
Most small businesses are looking for loans that are less than $100.000. For banks, this is a small amount that isn’t profitable for them.
- You Have Too Much Debt
If you have already accumulated debt from other loans or lines of credit, the lender will probably reject your application. It’s important to pay down your loans and keep your balance low.
- Your Reasons for Seeking a Loan Aren’t Serious
Why do you need a loan? The lender won’t issue you a loan if your reasonsdon’t make sense. You should show the loan will be used to grow your business so that you can pay the lender back.
When considering a small business loan, take into account all the above-mentioned points so to be sure you’ll get approved for the loan without challenges. Take the time to research all your options and choose the best for your business wants and needs.
When considering a small business loan, take into account all the above-mentioned points so to be sure you’ll get approved for the loan without challenges. Take the time to research all your options and choose the best for your business wants and needs.
