Step 1 Search online for lenders that allow you to leverage the strengths of your business when you apply for a small business loan. Consider your revenues and type of business as well as credit and time in business.
Step 2 TIP: Picking a program that matches your business strengths will go a long way towards getting approved.
Step 3 Review the criteria from different lenders needed for approval. Make a list of the top two or three funders and their best matching programs.
Step 4 Contact lenders online and by phone. Review as much approval criteria as you can with a representative. Try to get the best idea possible how closely your business profile matches the requirements for approval.
Step 5 Settle on the best match between business loan programs and your business strengths. Also consider your business requirements and time for funding. Apply for those programs that are the best match.
Step 6 Read the terms and conditions on any approval to make sure your business can make the payments and meet all the requirements. Complete closing requirements to fund the transaction.
Need to get approved for a small business loan? Apply now below:
FAQ Frequently asked questions on how to get approved for a small business loan:
Question: How do I qualify for a small business loan?
Answer: Know what your business strengths and weaknesses are. Look up funders that appear to best match your business strengths. Contact funders that your business appears to qualify with. Apply for those programs that are the best match.
Question: I do not like the business loan programs my business qualifies for. How can I get a business loan with terms and rates I want?
Answer: Your profile determines the business loan programs your business qualifies for. Evaluate and make a list of the programs your business is most likely to get approved for based on the company strengths and weaknesses. Pick a program from that list. The programs you want may not be the programs you qualify for.
Question: My business did not get approved for enough money. How can I get more money or how can I get it increased?
Answer: Ask the lender to increase the approval amount. The funder will sometimes increase the approval amount slightly just by asking. Your business may have strengths that were not known at the time of application. Give the lender any information that makes your application and request stronger. This includes the previous years bank statements and also tax returns or additional owner credit and new worth information. Other strengths include providing information on existing contracts and accounts receivables your business has. This proves revenue you expect to generate in the future.
Question: I was declined for a small business loan. How do I get approved?
Answer: Follow the steps listed in the how to section to increase your chances of being approved after your business was declined. Contact us to review best tips when applying. We will review your profile with you and also discuss the best programs your business is most likely to get approved for.
Question: How much can I get approved for?
Answer: The amount you can get for a business loan depends on several factors. The main things that are looked at is business revenues and credit. Other important factors are time in business as well as the type of business and the assets of the business.
Canadian Business bank statement loans and also Accounts receivables financing options. Complete the secure Docusign 30 Second App for Canadian business loan now.
Or call us at Tel: 1-919-771-4177, or Question?
What type of alternative business loans can I get in Canada?
Canadian companies can find alternative working capital loans available in the United States.
Another option is a business bank statement loan.
The company’s business cash flow is how they can qualify. Because of this, the business needs to have the following:
– $15,000 per Month in deposits each of the last 3 months.
– 5 or more deposits per month.
– An average daily balance of $2,500 or more.
How do I qualify for a business loan in Canada?
Review the alternative business loans for businesses in Canada on this page. Decide which option you may qualify for. Complete the Online application above or call and talk to a representative and discuss which loan option might be best for your business.
Canadian Accounts Receivables financing
After a Company’s products have been delivered or services rendered to another company, they send an invoice for payment. Canadian Accounts Receivables financing funds about 75% of the face value of the invoice is paid immediately to the company issuing the Invoice. When the paying company pays the invoice, the last 25% is paid minus a service fee. As a result, the company’s cash flow is accelerated by 100% during the year.
FAQ Frequently asked Canadian business loan questions and requests
– “I need a Canadian business loan”, or “looking for a Canadian business loan”. Some email requests include a “loan for a Canadian business”.
Canadian small business loans. Get easy and fast alternative business loans for businesses in Canada. Online 1 Page short 30 second Application. SCORE and receive free and low cost mentoring for business plans and financial statements.
This article will focus on the top 6 business loan decline reasons and several easy things you can do to prevent many of these declines. Use the following list to increase your chances of getting approved for a business loan by avoiding the decline reasons listed.
Don’t let your business get turned down for any of these top 6 business loan decline reasons.
1. Derogatory Personal Credit
Poor, damaged, or delinquent personal credit of the owner is the main reason for being turned down for a business loan. Most businesses are less than 35 employees and the personal credit of the owner is usually part of the credit review. If the personal credit score of the owner is low, there are some steps that might be taken to minimize the impact.
Short term Solutions:
Research different business loan products before applying. Try to apply for business loan products that have less scrutiny of the owner’s personal credit. If possible talk to the lender first. Find out how much of an impact personal credit has on their business loan product.
If there are multiple owners of a business and one owner has better credit, the owner with the better credit should be the first applicant. If the owner with the better credit is over 50% owner, the application may be approved without the other owner. This may prevent a decline for weak credit.
Longer term solutions:
Get a copy of your personal credit report and look for errors. You can dispute them with the credit bureau and your credit score will go up. Any derogatory items close to 7 years old may be on the verge of dropping off your report. If you have limited credit, this may be a time to consider what new accounts you can add to your credit bureau to make it stronger.
2. Derogatory Business Credit
Businesses can have derogatory business credit. This derogatory business credit may appear on a business credit report. Examples are State Tax liens, Federal Tax Liens, Suits and Judgements, Past Due Accounts and Collections.
Get a copy of your business credit report through Dun & Bradstreet or Experian Business credit report in advance of applying for a business loan. If there is incorrect information, the process of correcting it is similar to the process of correcting incorrect credit reported on your personal credit. Contact the business credit agencies and dispute the incorrect information. If the business credit agency cannot verify the derogatory credit, it may be removed from your file.
3. Insufficient Cash Flow
The lender believes that the business does not have enough cash flow to handle the new debt. If the lender is reviewing a P & L, Profit and Loss statement and it is showing a negative net income, that may a decline reason trigger. Overdrafts and NSF’s happen because of poor or insufficient cash flow.
How to avoid this denial reason:
If your business is declined for this reason, contact the lender to discuss it. There may be alternative solutions. Your business might be approved for a lower amount. This can include a starter line that lenders offer just to get the relationship started. Lenders sometimes do this with borderline decline instances. They want to take a small risk hoping that the borrower will develop into a good long term customer.
Weak financial statements.
Financial statements are still required for many types of business loans. If a companies financial statements are weak and show a low net income, decreasing revenues, or other weaknesses, it can easily cause a decline.
How to avoid this decline reason:
Some loan products are asset based. In these cases, the collateral must be satisfactory or the business loan will be declined. Real estate backed loans, accounts receivables financing and equipment loans require acceptable collateral. Even if the customer has excellent credit and time in business, if the assets do not have enough value or other conditions are not here, they may be declined.
5. Time in Business
The time in business requirement varies from one business loan to another and as much as 2 years or more may be required. Ask the lender if there is a time in business requirement. If there is, ask if it a hard and fast rule. For some lenders, if the applicant has other strengths in their profile, it may override the time in business requirement and be approved.
Some lenders will decline a business just for being in a certain industry. Often business do now know when applying the lender won’t even loan to their industry. This is an easy decline to avoid. Put this in the list of questions to ask a lender before applying. Do you lend to my type of business? Sometimes lenders have preferred industries that they lend to.
FAQ Frequently asked Questions on top business loan decline reasons
What are the main reasons businesses get denied for loans?
The top reasons businesses get rejected for loans are: derogatory personal credit, derogatory business credit, insufficient cash flow, lack of collateral, short time in business and industry type.
Why do I keep getting denied for business loans?
Frequent denials for a business loan are in most cases due to bad credit, low sales and profit and not enough collateral. Ask the lender why your business was denied to see if some of the decline reasons are the same. Ask the lender if there is anything you can do to change the decline to an approval.Our business was declined for credit. Is there anything I can do about it?
Ask if it was for personal credit, business credit or both. Try to get any credit bureau and business credit scores the lender will give you information on. Ask if there are minimum credit scores you did not meet and what those score are. Also ask how long you have to wait if you want to re-apply.
Our business was declined for not having enough revenue or cash flow, but we have good sales. What does that decline reason mean?
The lender determined that based on their criteria, your business does not have enough cash flow after expenses to safely pay the new debt. The lender did a cash flow analysis which may have included a debt to income type ratio. If your business is about to payoff any current debt or is increasing revenues significantly, then let the lender know about this. It may be possible to reverse their decision or get an approval on a lower amount.
Some lenders have industries that the do not considered favored industries. They may consider your industry as challenged or place it in a more difficult to loan to internal category. Ask the lender: Is my industry a preferred industry you lend to?
How to correct the business loan decline
Not all of these 6 top business loan decline reasons have to be corrected. Some cannot be corrected. The steps that should be taken are on a case by case basis. Every company has different hurdles to being approved for a business loan.
Using some of the tips above and your business can overcome many of these top 6 business loan decline reasons and get critical business capital.
In summary, the top 6 business loan decline reasons are:
Derogatory personal credit
Derogatory business credit
Insufficient cash flow
Time in Business
There are other excellent resources available to assist small businesses in many different industries prepare for a loan. The SBA has a 30 minute video session on how to prepare a business loan package.
Should you worry about any more decline reasons? What are other steps you can take? There are other considerations besides these top 6 business loan decline reasons. Others include declines for key financial ratios such as debt to income and declining revenues.
Businesses may get loan terms they don’t want and should consider Additional action steps in addition to the top 6 business loan decline reasons.
Thank you for visiting this page on overcoming the top 6 business loan decline reasons.
Choose from several hispanic business loan options . Flexible choices including easy application and personal assistance during the entire process. Lengths are between 3 months and as long as long as 10 years. Flexible approval criteria for almost all businesses. Low credit scores, tax liens and short time in business can also be approved.
$5,000 to $250,000. Fast and easy process. Just a 1 page application. Minimal paperwork and also bad Credit is Accepted. Tax liens can be accepted. Newer businesses also accepted. Complete the secure Docusign 30 Second application now.
Or call us at Tel: 1-919-771-4177, or Contact us
These business owners whose main language is not English often have difficulty getting business loans. This also includes foreign nationals who are often not familiar with the loan process in the United States. We provide extra assistance to these business owners. Many do not speak English and need further assistance.
Hispanic business owners have many needs, including needing equipment, adding new employees and money for materials. FAQ Frequently asked questions:
What is provided for hispanic business loans?
You submit the same information. A one page application and the most recent 3 months business checking account statements.
Do you have Spanish speakers?
Yes. We have speakers fluent in Spanish.
Can I get a Hispanic business loan in my personal name?
No. The application must be in the business name.
Can we get longer terms? Yes. The business can get a short term loan. This would be 3 to 6 months. Over 24 months is available.
Another source of information on minority loans is the SBA
Small Counties personal income, considered counties with populations of less than 50,000, represent 69 percent of all U.S. counties, and account for 10 percent of personal income in the United States, according to the Bureau of Economic Analysis, April 25th, 2012. In these 2,134 counties for 2010, other statistics as follows:
Net earnings represented 58 percent of personal income, while property income represented 16 percent and transfer receipts comprised 26 percent.
Net earnings increased 3.8 percent, which is up from -5.0 percent in 2009. Property income increased 2.3 %, up from -12.7 %. Transfer receipts grew 5.2 %, down from 12.4 %
Personal income growth also varied from 51.6% in Hyde, South Dakota to -18.8% in Hand, South Dakota.
Per capita personal income varied from $94,672 in Teton, Wyoming to $16,299 in Crowley, Colorado.
Personal income is a full measure of the income of all individuals from all sources. On top of wages and salaries, it includes employer-provided health insurance, dividends and interest income, social security benefits, with more types of income included.
The super committee was established to recommend solutions to the federal budget deficit. It’s due to report recommendations by November 22nd. Will it’s recommendations affect small businesses?
The answer is most certainly yes. Indications are it appears the expected decision by the super committee will affect businesses in a negative way in the short and medium term.
The super committee has to decide whether to recommend only spending cuts, or a combination of spending cuts and higher revenues. Increased revenues is considered code for higher taxes. If the super committee provides recommendations that are heavy or solely cuts, expect steep cuts to major government programs in the next few years. This will have to include cuts to major programs such as Social Security, Medicare, Medicaid, NASA, and defense. That will be true if the reason for the existence of the super committee and it’s goals are to be met. It will have to include cuts to many smaller programs such as farm programs, the small business administration, the department of Transportation, and others. This will affect small businesses in many ways.
Medicare / Medicaid – Many physicians accept Medicare and Medicaid patients. When Medicare and Medicaid are cut, both programs will likely be forced to lower the reimbursement rate to doctors. This will further cut into the profits of medical practices, lowering their gross receipts and profit margins. Many physicians already may feel that they cannot run a profitable enough business. This will result in many physicians and medical practices discontinuing to accept Medicare and Medicaid patients. Some may totally discontinue accepting new Medicare and Medicaid patients.
Defense and NASA – Major cuts to the defense department may occur. if so, it will have a major affect on many businesses across the country. In addition to the large defense contractors, there are thousands of smaller contractors that work with the larger contractors. There are even smaller companies that contract with these smaller contractors. Many more businesses derive their revenue simply by being located in the area of the largest contractors. Businesses such as restaurants, gas stations and retail shops will all take a hit. The defense department is at the top of the food chain and any changes have long tailed effects. With a budget in the $700 billion range, a $100 billion or $200 billion dollar cut can have a major affect on the economy.
Other programs – Other cuts by the super committee may affect the Small Business Administration, farm programs, the department of transportation, the department of education, and a long list of programs.
There is major pressure on the super committee to cut spending, and that doing so is a good thing. There has been very little discussion of how it will affect the economy. Long term effects of a lower budget deficit will be positive 5 to 10 years out. However, cutting spending in the short and medium term, as outlined above, will negatively affect many businesses. Revenues will be lower, contracts will be cut, businesses that are indirect recipients of the government programs will see lower sales as the businesses they feed off of have lower revenues.
In short, spending cuts by the super committee means less money to businesses, regardless of the issue whether the government has been overspending or not.
A – The SBA (small business administration) may get hit with cuts along with the many other non defense programs. Small businesses are having a very difficult time now getting loans from banks. If the SBA loan programs are cut back in funding, businesses will have even fewer options than they had before.
B – Farm Programs – Currently, farmers and businesses related to farming sometimes need government programs to assist them during times of droughts, early frosts and other times of crop destruction. Reductions in these programs will put farmers and related industries under greater pressure and more farmers may be forced out of business.
C – The department of Transportation – New highway construction programs, highway repair, rail programs such as Amtrack, funds for building and updating shipping ports will all take a hit if the department of transportation is cut.
Small Business Loans Resources:
Thank your for visiting our Small Business Loans resource page!