So, your bank said “No” to your application for funding. That can be frustrating and disappointing because every business likely will require added funding at some point to thrive and grow. But that is no reason to give up on your dreams nor block your plans for growth. Instead, eagerly pursue other business financing options.

Why Do Banks Deny Business Loans?

Here are some reasons that banks will deny applications by existing businesses for business financing:

• Lack of a consistent cash flow record. 

• Insufficient collateral. 

• A debt-to-income ratio that is too high. 

• A narrow customer base. 

• A weak or insufficient business credit score. 

• Too little time in business or concerns about the business’ operating history. 

• Risk concerns regarding the industry in which the business operates. 

• Insufficient management team. 

• Asking for too little money to serve the real needs of the business. 

• Incomplete application paperwork. 

• An absent, incomplete, or weak business plan.  

Business Loan Options—Where to Get Financing

When a bank says “No” to your business financing application, here are some great options:

• Confidently approach other banks or credit unions. 

• Seek a Small Business Administration loan. The SBA 7(a) loan is a great source, often providing lower interest rates and longer repayment terms compared to conventional loans. 

• Develop a partnership with an experienced professional or professionals that will provide funding and hopefully additional experience to propel your business forward. 

• Pursue business financing from angel investors and venture capitalists (who will likely request equity in the company.) 

• Seek crowdfunding if your business is an attractive startup. 

• Generate funds from trade credit/vendor financing. 

• Pursue alternative financing including inventory purchase programs, merchant cash advances, and accounts receivable financing.  

Seek Expert Business Financing Assistance

Contact Overhead Capital Ltd. for financial solutions to address your startup and ongoing capital needs. Our experienced financial professionals can help you secure funding to meet your business’s financial needs and goals to help you succeed.