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Can’t Get a Business Loan? Here Are Your Options

According to Q2 2019 Private Capital Access Index (PCA Index) from Dun & Bradstreet and Pepperdine Graziadio Business School, there is a growing number of small business owners that are seeking to gain more access to capital than in the first quarter of this year. However, they are struggling to secure bank loans.

In the survey, 36% of businesses tried to raise funding in the second quarter, with an increase from 28% in the first quarter. Only 32% were able to secure financing from a bank loan in Q2 2019. This figure is down from 44% in the first quarter of 2019.

The results can only mean stagnation as 52% of small business owners are feeling the pain. They are reporting that the inability to secure a bank loan will restrict their opportunity for growth. Forty-seven percent have already stated that this is keeping them from hiring more employees.

Have you been rejected for a business loan?

If you have, then it’s time to not give up, but become inquisitive.  Dun & Bradstreet specifically recommends that you find out why you were denied in the first place.

After you have done your homework and determined the reasons for your denial, then it’s time to take action to get the financing you need.

Some of the steps include the following:

  • Improve your personal and business credit score: If you are a startup, it is more likely that the bank will be looking at your personal credit score. You can get a free copy of your personal credit score by visiting If you are a veteran in business, then your business credit score will be the determining factor used by lenders. At this point, ensure that your creditors report your payments to business credit reporting agencies such as Dun & Bradstreet, Experian and Equifax. You can check your credit report with each of these for a fee.
  • Increase your business cash flow: The lender’s primary concern is whether or not you have adequate cash flow to repay the loan. Regardless of having a pristine credit score, lenders will deny a loan if the cash flow is sparse. Seek to reduce debt to free up more funds. Pay close attention to your receivables to identify and eliminate any dips in cash flow.
  • Seek alternative financing sources: Some options can include business credit cards, crowdfunding, online lenders, factoring, and merchant cash advances. However, before you consider any of these aforementioned methods, it is critical that you determine the right resource for your needs. Also, know that although these methods are incredibly convenient, they are also pricier. Do your research to determine the interest rates, fees, penalties, and other costs.

As a business owner, you will need a fresh infusion of capital throughout the life of your business. Knowing this, it is imperative that you do all the preliminary preparations to ensure that you are in good standing in both your personal and business credit score.

Also, partnering up with a bank and openly discussing your plans, opportunities, and risks, can better equip the banker to create a tailor-made solution and suggest the best products for your business.

By taking these actions, you are demonstrating to your lender an unwavering commitment to your business, which will better position you for the approval of a business loan.