Growing a small business is not easy and may be rather challenging sometimes. Business owners regularly face problems that may put their companies at risk. Of course, to take their business off the ground and start growing, entrepreneurs should secure business financing.
Though there exist a wider variety of funding options, finding one can be rather problematic. Below you can read important statistics concerning the fact why you may get refused when applying for a bank loan or credit line.
According to the Small Business American Dream Gap Report, about 3 out of 10 small businesses had more difficulty to cut operating costs than in the past. Almost 1/4 of small businesses found it difficult to plan for sudden expenses.
In 2015, 20% of the small businesses having participated in the survey reported they had decided to close as they didn’t have enough growth or had problems with cash flow. 53% of these small businesses had decided to get funding or a credit line over the last 5 years. 20% of applicants (over the last 60 months) reported they had been rejected. 45% of those who hadn’t been approved said they had been refused more than once. 1/3 of the mentioned businesses didn’t know the reason for the denial.
The research showed 62% had used their personal savings and 24% their personal credit cards 22% had relied on their business credit cards, 10% had tuned to their family and friends, and 36% had been approved for a bank loan.
If you’re looking for low-cost and reliable business funding, consider applying to firstamericanmerchant.com. As a reputable business loan provider and payment processor that specializes in the high risk sector, First American Merchant (FAM) offers exceptional business funding opportunities to merchants of any type and size.
Based on the study, the main reason why small businesses are refused when applying for a bank loan is that they have no knowledge of their business credit score. Nearly 45% of those having participated in the survey weren’t even aware of their business credit scores. 72% had no idea how they could learn about it. More than 8 out of 10 weren’t able to interpret their business score.