“My business loan was turned down because my account is overdrawn”. “My account is overdrawn and I need a business loan. ” What can I do?
These are some of the requests people have in trying to find out how to get a business loan when an account is overdrawn, is in the negative and has a negative balance. Apply for low balance programs below that include if your account is overdrawn now.
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How to get a business loan when an account is overdrawn:
- Step 1 You can apply while your account is overdrawn, however it is best if you can make it positive during the application process. The processing may go quickly and a bank verification may be done before you have a chance to make a deposit and put the account into the positive.
- Step 2 Keep funds in the account until closing. The lender may check your account at anytime before closing.
- Step 3 Pass bank verification. The lender will verify your account, including the balance and also the most recent activity in the last few weeks.
Overdrawn accounts, negative accounts and accounts with a negative balance: how it affects a business loan request and what to do next.
Declined for business loan request.
If one of the reasons your business is declined for a business loan request is your business checking account being overdrawn, it will be harder to get approved in the next 15 to 30 days. Many funding companies do not want to fund to a business that is overdrawn or has just been overdrawn on their business checking account. The minimum balance they want to see is at least $500, even if your account does not go overdrawn. Lenders like to see the average daily balance of the business checking account to be $2,000 or more.
The lender may tell you they will re-consider your request once your account has been in the positive for 30 days. You can do this, but most businesses do not want to wait. What can you do?
Apply with another lender
This may be your best choice if the account is now in the positive and the lender will not re-consider the request for 30 days. In this case, choose another lender and apply. If your account is still overdrawn it is best to wait until you can get it positive. Lenders will not fund if they know it is overdrawn.
Consider other loan options
Asset based loan
Another option is also a loan against equipment, also called a loan on collateral. This type of funding is between 24 and 48 months with a monthly payment. Equipment such as construction equipment and also semi-trucks may qualify. Trucks must be 2009 and newer.
Accounts receivables financing
Accounts receivables financing can be an excellent way to save the business cash flow. You may be able to get the capital the business needs this way.
Your customer is already likely factoring for other clients and is probably not the first one they are factoring.
Contact us to discuss other loan options if you need more information on how to get a business loan if your account is overdrawn. If we cannot assist, we may be able to refer you to someone who can.