It’s not uncommon for businesses of all sizes to need financial assistance at some point or another to make ends meet or achieve growth goals. Banks have been cracking down on borrowing and making restrictions tighter, making it more difficult for businesses to get the funding they need. If your business has been turned down for a loan, here’s what you can do.
Improve Your Credit Score
As a business owner, you have two credit scores: one for you and one for your business. Both credit scores are taken into consideration when determining eligibility for a loan. While your personal score might have met the minimum requirements, your business’ score may have been too low.
Take steps to improve your credit score is vital. Open a business credit card or line of credit. Make your payments on time. Maintain a credit utilization of 25% or less. Be sure to work with companies that report your payments so they’re reflected in your credit history.
Consider Alternative Funding
Traditional bank loans aren’t your only business funding option. Perhaps a business loan isn’t the best solution for your business. Fortunately, there are plenty of alternative options. You can find solutions such as merchant cash advances, equipment financing, and invoice factoring. A quick online search can help you find numerous lenders ready and willing to help.
Try Another Route
Instead of working with a lender, you can try a different route. Look into other options as well, such as angel investors or venture capitalists. For such avenues, you will need to have a well-thought-out business plan and show potential investors just what your business is capable of. The more convincing you are, the more likely you are to get the support you need.
While it can be disheartening, a rejected business loan doesn’t mean that your company is doomed to failure. There are plenty of things that you can do to get the financing you need to grow and succeed.