When you’re a small business, having a loan refused can be your literal worst nightmare. You may have been depending on that cash boost to ensure your business’s growth. Having your loan refused can be quite discouraging, and you may want to throw in the towel… However, it’s a good idea to assess why it was refused, and what steps you can take to rectify it! Here are a few common reasons to consider if your business loan was refused:
When a creditor considers your credit score to be “too low,” it’s one of the most typical reasons for a business loan to be refused. Even if your company has been in operation for a long time, your personal credit score is taken into account when applying for a small business loan. They want to know that you are dependable and will be able to make payments on time, by reviewing your personal credit score, they’re able to asses if your personal habits lend themselves to being trustworthy and financially responsible. If you’ve been turned down because of a poor credit score, evaluate your score and work on improving it, this may increase your chances of being approved by your chosen creditor.
Your Business Is Not Old Enough:
If your company is still in its early stages, you may not have enough credit history to qualify for a business loan. It’s worth noting that merchants don’t always automatically record your payments to the commercial credit bureaus. When you open an account with a new provider or contractor, ensure that they log your payments in order to reflect a positive credit history from the start.
A “Risky” Industry:
Traditional lenders such as banks, view some industries as more “risky” than others. If your company is in an industry that is considered to be “risky” , such as gambling or restaurants, you may encounter additional challenges in securing a buisness loan. If you were turned down because of this, look for lenders who specialize in your industry.
Although qualifying for a business loan can be a difficult process, there are many other avenues to consider apart from going through traditional lenders.
Do I qualify for funding from GroWise?
You are a good candidate for quick funding solutions from GroWise if your business:
- Is older than 6 months.
- Is registered with the CIPC
- Has an average monthly turnover of R30K+
What funding solutions can we offer you?
Business Cash Advance
Simply put, a cash advance is a purchase of your company’s future income based on all your income streams, with customizable terms and either pre-determined or variable repayment amounts, so you can easily plan how you’ll utilize your funds.
Merchant Cash Advance
A purchase of future income with flexible repayments deducted directly from your merchant account.
Merchant Stock Advance
At GroWise Capital we also have a Merchant Stock Advance as an alternative funding option. It’s easy! We buy your stock, and sell it to you. Easy and flexible repayments to fit in with your business!
There are countless reasons to seek out funding, and our goal at GroWise is simple, to get your business funded and growing… fast.