Nearly every small business owner needs financing at some point during their time in business, but not everyone knows where to go to get that financing – or worse, what to do if you’ve already been turned down for that small business loan. A loan rejection doesn’t have to mean that your small business dreams are over.
Here are some steps to take when your small business bank loan application has been rejected:
- Find out the reason. There are a number of reasons why your application could have been rejected. The first step is identifying what specific aspects of your profile and credit history were not favorable to your lender. Be sure you’ve included all of the information that’s pertinent to your situation in your application and every bit of financial data that your lender has asked for. It’s possible you’ve been turned down due to a simple error or typo.
- Keep your head up. It’s easy to get discouraged when you see a big red “rejected” stamp on your loan application. Don’t give up! Pick yourself up and keep moving – being turned down for a bank loan isn’t the end of the small business financing road for you.
- Check out alternative lenders. Banks just aren’t lending as much as they used it. It’s really that simple. If you went to a traditional bank as your first stop for financing, now may be the time to check out what an alternative lender, like Direct Capital, can offer you. Alternative lenders will often be much more flexible with their regulations and much more willing to work with small businesses that have less than pristine credit.
- Get your credit in order. If you were turned down due to some very real concerns over your credit history, now is the time to start taking action. Take a look at your credit report for any erroneous information and start putting as much as you can afford into your credit card payments. It may be painful at first, but taking swift action to repair any damage to your credit will go a long way to ensuring your small business success.
Have you ever been turned down for a small business loan?
Direct Capital is a leading provider of small business financing.