It's a typical scenario: you're a small business and you want to expand or take on a new project perhaps. However, you need an influx of cash for things like advertising, equipment, payroll, more office space. You go to the bank, submit an enormous amount of paperwork, wait weeks if not months only to be told a resounding "no."
More and more banks are coming back with a negative decision for those small business owners looking for a loan or line of credit. So why exactly are they rejecting your application?
You have little to no collateral. Banks like to have something to ‘back up' the money given. This could be real estate, equipment, or a number of personal assets could also count as collateral. You may be in a position though where you simply don't have enough to satisfy the bank, and in turn, your loan application gets denied.
You've only been in business a short time. The duration that you have been in business will factor into your loan application. Relative newcomers, those who've been operating for less than two years, generally do not have a very good chance of qualifying as you've not yet proven that you have a track record of which to speak.
Not enough revenue. Again, if you are relatively new, then your revenue may not be where banks like to see it. Or you could be having a bad year and thus need a loan to weather the storm—the problem is, you're stuck because you can't show adequate revenue.
Your credit is less than ideal. This is a big one for banks. With credit scores below 650 for example, it becomes increasingly difficult to qualify. They generally prefer to see 700 or above.
Here is where an alternative lender such as First Union can be a great asset! We do things a little differently, which means our loan programs are tailored to meet your specific needs, regardless of credit score or collateral. With turnaround times in as little as two days, you're also not waiting endlessly for the money. Call today and see how we might be able to help!