At some point during the business startup process, business funding crosses every entrepreneur’s mind. Needing extra capital isn’t a matter of if, but when. Some business owners seek support from friends and family at first, but as their business grows, they find themselves in need of larger sums of cash to fund opportunities and expand their operation.
Unfortunately, securing funding is easier said than done. There is a long list of business types and industries that struggle to secure funding for one reason or another. In fact, according to recent small business lending statistics, nearly half of all small businesses applied for a loan last year. So, why does one industry qualify for more overall funding than another? And is there anything you can do about it?
Which Small Businesses Receive the Most Funding?
According to the latest research, the top ten industries that received the most funding from lenders in the past 12 months were:
- Retailing electronics
- Auxiliary health services
- Physicians/doctors office
- Strategy/general consulting
- Software development
- Hotel, motel and lodging
What makes these businesses stand out more than others in the eyes of a lender? These industries typically have proof of revenue; they have the months of bank statements lenders want to review when considering a loan application. They also show profitability and good personal and business credit scores. Also, the longer the owner has been in business, the better. Lenders prefer to work with companies that already have time in business because it makes it more likely that they will be around for a while.
The Struggle of the High Risk Business Owner
But what if my business is new, with no proof of revenue, profitability, credit scores or time in business? If your business lacks this information and faces other challenges (e.g. high chargeback rates, risky industry, poor credit, etc.) it will be nearly impossible to secure funding from a traditional lender. They will simply deem your business too risky and turn you away.
As a high risk business owner, your best option is to partner with a high risk specialist, like firstamericanmerchant.com, and secure alternative small business loans. Our team has years of experience in helping business owners succeed, despite being categorized as “high risk”. The application is fast, simple and hassle-free. Your business can have money in its bank account in as little as 24 hours to add to your team, cover expenses, boost cash flow and fund growth.