The road to business loans is littered with the metaphorical skeletons of many a small business owner.
There are many reasons why you might be rejected in your quest for a business loan, some of them entirely out of your hands. Some banks will bring you in for a loan discussion even though they’re working out of cardboard boxes on the side of a freeway. It’s still not an ideal time to go to the bank for a loan, is what I’m saying.
Still, some of these factors are within your control. There’s one in particular that will deep-six your chances of getting a business loan faster than you can say “please don’t reject me I need this loan to live!” Which is precisely what you shouldn’t say, by the way.
My colleagues here at Direct Capital regularly see customers who, for reasons that range from sheer desperation to just not knowing the best way to sell their business, come to our company wearing Calvin Klein’s “Desperation.” I’ll give you a hypothetical example that nonetheless closely matches several we’ve received in recent weeks.
It was the best of times, it was the worst of times. No, I’m kidding. It’s the worst of times. I need help. Please, please, please help me. If you help me, I will be your best friend forever. I need a business loan or my business is going under. I am not going back to selling aquariums from the back of my van!
Look, there’s a powerful urge to be honest with a company that’s going to hold your financial future in their hands. It’s hard to hide the fact that your business has fallen on hard times, and I understand that. I’m not trying to be flip about that.
But coming in and saying your business is on the verge of failure will disqualify you for almost any kind of financing that isn’t predatory. It’s a huge mistake. Paradoxically, by spelling out the reasons you need help, you will destroy your chances of getting any. Don’t do it.
Instead, apply for financing by underlining a need. If you need a new fridge for your restaurant to keep your business going, say you need a business loan to help you finance said fridge. At some point the company is going to look through your credit history and financials, but once you’re in the door you can work with the lender and potentially get past that. If you come in the door wild-eyed and ringing a giant bell with the words “on the verge of failure” etched into it, you’re doomed. Project confidence and specific needs and you’ll fare much better.
How do you position yourself when you’re looking for a business loan?
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