How many times have you been turned down to a business loan application? Well, a couple of times may be. All those efforts you had put went ashtray with a single word, “NO!”
Do you ever wonder why it is only you who is always denied for a business loan application when other businesses like you are constantly being helped by business lenders?
There’s no rocket science your competitors are using. It’s just these 5 basic rejection causes they take care of, and they are eventually blessed with an instant funding for their businesses.
#1. Your Credit Score is Poor
Does it sound too obvious? Well, of course, it does. But it remains to be the top-most reason as to why tons of business loan proposals are rejected every day. However, every lender has its own number, while some lending institutions also give weight to a business loan proposal on the basis of its overall business health instead of just focusing on the arbitrary credit score. But still, if you count the numbers, you’ll find almost every other business lender peeping hard into your credit score before granting you a business loan.
If it’s your business score that got you rejected, consider checking it over at Dun & Bradstreet or if it’s your personal credit score, do a quick look up over at Equifax and Experian. Once you’re ready with the reports, try GIVING ANOTHER SHOT!
#2. You’re Relatively New to the Industry
The second most reason for rejection is, your business may not be too old to trust. The older you are, the more credible you are. That’s how it goes!
#3. Your Business Falls into the ‘Risky Zone’ or ‘Gray Area’
Some industries are a NO GO for business lenders. An industry that is not capable of generating enough cash inflows is straightaway rejected by the lending institution. And even if your business belongs to a banned or gray industry like gambling, you know the answer. It’s a NO for you again.
However, you’ll definitely find alternatives who may grant a business loan to your industry but that requires some extensive research to be conducted by you. Maybe a friend or a relative might be able to suggest you an option.
#4. Your Collateral is Not Sufficient
Collateral is a must requirement for any traditional business lender. If it’s the collateral that made you face the rejection, consider looking for alternatives (unsecured business loans) that don’t ask for any form of collateral.
#5. Your Business is Indebted
Who bothers to lend a loan to someone who is already surrounded by a lot of debt? Think from a lender’s perspective. If it’s your debt burden due to which your business loan application was rejected, consider running a quick fine glimpse over at these things:
• Your existing loans
• You’ve borrowed more than one business loans in the past 3 months
• You were about to use this business loan to pay another business loan
So, which one of these reasons you think got you rejected for good? Please feel free to drop your comments by!
