One of the first lessons that every small business owner learns is rejection. No matter how much experience you have or how great your product is, rejection is a part of doing business. Unfortunately, many merchants experience rejection from the start because most banks won’t give money to high risk businesses. While this can be discouraging, there are steps you can take to get the capital required for your business to succeed.
Get Feedback from Banks
The bank that rejected you is the best place to go for information on how to be successful in the future. Ask the loan officer what banks are looking for when approving loans. Lenders generally look at a combination of credit score, sales history, business plans and business history to determine loan status, but other factors can be involved so get as much information as possible from your loan officer.
Up Your Business Credit Score
Many lenders will look at the personal credit score of business owners and business credit scores. You can get your business credit report and credit score from Equifax, Experian, or Dun & Bradstreet. Be sure to review your business credit report with a fine tooth comb. Take action against any mistakes that could be negatively impacting your score. Also take action to manage your current debts. Be sure to make your credit card payments on time and pay down existing debts.
Consider Other Funding Opportunities
Small businesses can acquire funds from sources other than banks. Since traditional lenders have more restrictions and higher standards, some merchants choose alternative lenders as a source of funding. Online small business funders like First American Merchant (FAM), offer flexible lending programs that offer small loans regardless of business history, credit scores or experience.
Merchant cash advances are a popular alternative to traditional business loans. In this situation, lenders give merchants an advance against future credit card sales, and collect money from future credit card transactions (the holdback) until the advance is paid in full. Payments range from 5-20 percent of sales. Many small merchants and lenders prefer this arrangement because it guarantees that lenders will be repaid no matter how slow business gets. This drastically lowers the risk of default.
FAM is a veteran merchant cash advance organization that helps businesses like yours achieve success. Our acclaimed loan program has a simple application process designed to get you critical small business funding in less than 72 hours. Applicants need not supply any tax returns or financials. Contact us now to start your application.