Are you an entrepreneur, or small business owner looking for capital? Although banks may seem like the best option if you need a loan, they are only one option. There are many other funding options available for those who don’t meet the criteria to get a traditional loan from a Bank.

It is now easier than ever for you to obtain capital for your company via the internet. Online lenders or “nonbank” lenders offer alternatives financing options to small businesses. They can help you achieve your goals. These lenders offer a modern approach, which can be refreshing after dealing with lengthy processes and paper applications for bank loans.

Non-bank lenders can also be more flexible in terms of credit requirements. These lenders will use data-driven algorithms in order to assess the risk profile of applicants. This makes them ideal for anyone with solid business finances who is looking for quick funding. This technological approach to business finance is not perfect. There have been instances where entrepreneurs were given unfair terms even though they met the minimum eligibility requirements.

National Business Capital can help you avoid the lengthy bank underwriting process and AI errors. We are a marketplace that brings together 75+ lenders under one platform. This allows you to receive multiple competitive offers through one simplified application. Our technology doesn’t replace our staff. Each member of our team has the skills and talents that compliment their natural talents. Our years of experience with lenders allows us to negotiate terms that AI cannot. This allows entrepreneurs across the country to quickly find the right lender for them.

Don’t worry if your bank denies you a small-business loan. Here’s how to find capital after a bank, credit union or other institution declines your request .

Why would a bank deny my small business loan request?

A variety of reasons can cause banks to deny small business loans, including your credit score, industry restrictions, or inability meet eligibility requirements.

A small business loan application rejection is often caused by your credit score not meeting the minimum requirements of the lender. Banks are known for demanding high credit scores. If you don’t meet the requirements, you might spend weeks, months, or even years waiting for a decision, only to be denied. Lenders will have different criteria, so make sure you fully understand what they are asking to avoid spending time filling out an application that won’t be approved.

A bank might also deny you an application due to your sectorspan styling=”font-weight 400 ;”>. You might be considered too risky by banks, or they may not have enough knowledge about your industry to assess your risk. Banks routinely decline applications for restaurant loans due to the high failure rate and cash flow constraints. Because of the stigma surrounding cannabis and inexperience with it, banks are hesitant to finance it. Banks don’t like taking risks and approval can be difficult for organizations that are at least slightly at risk of default.

You may also need to meet other eligibility requirements such as the length of your business and your annual revenue to get the capital you need. While some banks may prioritize one over another, in each case you will need to meet their requirements to be able to receive funds on time.

This all adds up to a stressful and confusing situation for entrepreneurs trying to achieve their goals. If you are denied, don’t despair. There are many funding options available.

Alternatives To Bank Financing

You may feel discouraged if a bank declines your application. This could make you think your dreams of growing your business are over. There are many alternatives to traditional small-business bank loans. These are five options that are more common than a bank loan.

1. Online Lenders

With the rise of the internet and its dependence, online lenders have gained popularity. Instead of going to your bank branch, you can apply online for a loan for business. You will receive a response much quicker than if you went to a traditional lender. The downside to the speedy process and ease-of-use is that you will pay higher interest rates.

While many entrepreneurs get distracted by the expense of capital, what is important is how your business will look after you have used the funds to grow? If your revenue, productivity or efficiency increase, a higher interest rate will be negligible. So make sure you keep your eyes on the long-term and not just short-term concerns.

2. Business Credit Cards

A business credit card can be a great way for you to get cash quickly when you need it. One-off purchases can be made quickly, and the payments can be managed over time. This can help ease your cash flow. You may also be eligible for lucrative rewards programs with some cards, so make sure you compare all options before you apply.

A business credit card has a limit. You can’t borrow more than that amount. A business credit card may not be able to provide the loan amount you desire if you are trying to borrow large amounts through your small business loan application. It’s an effective tool for entrepreneurs in all industries, so you should look into it alongside other funding options.

3. Savings for yourself

For new businesses to start, they may require cash infusions. It can be difficult to get a loan for your growth if you don’t have a business history. You may need to use your personal savings to achieve your goals and build a customer base to make your company profitable. Although many entrepreneurs avoid using their personal funds to help them grow their businesses, if you manage your finances well, it can still be beneficial.

4. Grants from the Government

Based on your personal characteristics and industry, you may be eligible for federal, state or local business grants. The best thing about government grants is the fact that you don’t usually have to repay the money. This option is highly appealing to entrepreneurs because there’s no repayment, making them extremely competitive.

This is a problem that can be easily fixed with some proactive research. To ensure you are one step ahead of other entrepreneurs looking for the same funding, make sure to research available grants in your state or local jurisdiction.

5. Crowdfunding

Crowdfunding refers to when a group of people pool their funds together to support businesses and projects. This was traditionally done through large events or word-of-mouth networks. However, online crowdfunding platforms have become extremely popular in the past decade. You can leverage these resources, whether you use SeedInvest Technology or Kickstarter. However, you will need to ensure that others see your plan and are willing to contribute.

There are many options for capital, regardless of what kind of business you run. There are many options to get capital for your business. Before you make the leap, ensure that you research all options and select the best one for your company.

National Business Capital can help you streamline your search for capital–even if the bank denies your application

It can be difficult to find capital, especially if you are looking for large amounts. While most entrepreneurs will go to their bank first, a rejected application can make it difficult for you to keep going with your search. There are many other lending options available. National Business Capital can help find the right small business loan for you.

Our experienced Business Finance Advisors use a network of 75+ lenders to find the right lender for each client. There is no one-size fits all approach to business financing. That’s why we spend time getting to know you and your company to help find the right solution for your needs. Our team will advise you on the best option for your business.

Do not let rejections by banks stop you from reaching your full potential. With National as your partner, this is possible. You can get capital that suits your business, not your bank, and use it to foster sustainable growth in your company. We have extensive experience in almost all industries and can help you leverage our relationships as you grow. National is the right place to turn when you are in need of capital.

To get started, please complete our digital application. Our team will contact you promptly once you have submitted the application.

FAQs

What do banks look at when approving business loans?

To determine whether you are eligible for business loans, banks and credit unions will examine your financial information. Before making a decision, they will evaluate your credit score and time in business. They also consider outstanding liabilities, your business plan, and other factors. If they feel your business is qualified and you are not a risk, they will approve your loan request. They will also provide your funds quickly.

They might also be able to review how you intend to use funds for loan products like term loans. You can greatly speed up the process by having a business plan and all necessary documents ready for review.

What Qualifies You for a Business Loan?

There are many reasons why your business loan application may be rejected. If you do not meet the eligibility criteria, or have a poor financial history, banks will deny your application for a business loan. You are less likely to be approved if your criminal history or previous defaults are included. If the bank isn’t happy with the use of funds you have in mind for certain loan products, it can disqualify you.

Will they check your credit for a small business loan?

Yes. Most lenders will review your credit history before you are approved for a small-business loan. The type of loan you are applying for, the amount that you want, and the lender with whom you do business will all affect the FICO score you need. To increase your chances of approval, it may be worth proactively improving your credit score.

National uses soft credit checks to protect our clients’ credit scores. You don’t have to have a great credit score to finance equipment. As long as your business has been in operation for at least 1 year and you earn $120,000+ per annum, it’s okay.

What Credit Score is Required for Small Business Loans?

Each lender has their own requirements for credit scores. These will vary depending on the type and amount of small business loans you are applying for. However, it is recommended that you have a minimum of 600+ credit score before applying. The chances of getting approved increase with a stronger credit score. It’s advisable to strengthen your credit score before you start the application process.

National requires a minimum 580+ FICO score in order to be eligible. We offer financing options for all types of businesses. If you don’t meet our criteria, we will refer you to another lender who can assist.