How to Get a Small Business Loan When the Bank Says No
Banks are required to follow a formal set of criteria when deciding whether you’re eligible for a loan or not; this includes your credit score, how long you’ve remained in the business, your monthly revenue, and other factors. This is why getting rejected shouldn’t be taken personally. Luckily, there are other options for you to consider. So where to go when the bank says no?
- SBA loans
This type of loan is rather versatile, and one of the best small loan options to finance your business. For example, you can use it to buy the much-needed tools or furniture for your brick and mortar store or workshop. If you don’t have a place to call your home (or in this case, your central base of operations), SBA loans may be the key that unlocks the doors for you.
- Crowdfunding
Have you heard of the popular crowdfunding platforms like Kickstarter and Indiegogo? In a nutshell, it’s your task to present your project in the most positive light possible and motivate people to back you with their hard-earned funds. In exchange, they get exclusive perks like being the first ones to be able to benefit from your product or service or similar types of cool bonuses. If the funding goals aren’t met, the money is simply returned to the backers. In order to be successful, you’re going to need to come up with a truly impressive presentation, and – of course – have an amazing product to begin with.
- Friends or family
If you can get a small business loan without the formal obligations and the pressure surrounding them, this is a route worth exploring. Even so, trying to get a loan from one of the people close to you likely won’t bear fruit unless you’re good at persuasion. If you’ve proven to be reliable in the past and if you’re a man of your word in general, they are much more likely to say yes. However, be advised that if your business goes under even though you’ve assured them it’s going to be a profitable venture, there’s a possibility of leaving a dent in their trust forever. Therefore, you should proceed with caution, even if your loved ones are less likely to come after you through legal means.
- Micro loans
The business owners who are unable to get a traditional loan from a bank often turn to this method of financing. There are a whole bunch of providers for you to consider, and since things can literally change in a single day (especially online), it’s best to do a quick Google search to find the best providers. Each of them has a unique set of rules, and while some check your credit score and others don’t, they’ll probably need at least some way of knowing you’re a reliable business partner who will be able to pay back the loan when the time comes.
Conclusion
These are only a couple of options for you to consider, but they should be more than enough to get the ball rolling. As with all things in life, perseverance is what’s going to tip the scale towards success and get you the loan to kickstart your business; even if you get a “no” 10 times in a row, the eleventh answer could very well be a “yes”.
