Did you know that many factors can keep you from getting a business loan? You might be surprised to learn about some of the problems that could prevent your application for financing. Here are 13 reasons why people get denied a business loan:
-Bad credit is one of the most common reasons people don’t qualify for loans. If this is an issue, there are ways to increase your credit score and improve your chances of approval.
-If you have no bank account, it will be difficult or impossible to receive funds to start up your company.
-You also need enough collateral to apply for a loan; if you lack assets, this will not work out well for you.
-If you have unpaid debt in your name, lenders will not want to take on this risk because it could result in them having issues down the line with repayment.
Lenders also look for stable and profitable businesses; if yours isn’t doing well or is deep in debt, they won’t be interested either.
-Some people are turned down because they don’t have a business plan or idea about how to finance their company. It would be best to research and be prepared before you apply for financing.
Providing documented proof of your income and assets also helps; this is why you must keep accurate records throughout the application process.
-If you have a criminal record, this could also prevent you from being approved for a loan.
-Age is also something that lenders consider; if you’re too young or too old, they might not feel comfortable giving you money.
-Some people are denied because their company is in the early stages of development and is not yet generating income.
-Lack of experience in the business world can also be an issue.
-If you’re not a U.S. citizen, it’s likely that you will not qualify for a loan because most lenders require proof of residency.
These are just some reasons why people don’t get a business loan. If you’re thinking about applying for financing, then it’s essential to learn all of the requirements and be prepared in advance so that your application goes smoothly.
-Don’t apply for a business loan until you have researched lenders or financial institutions to find one that will best suit your needs/requirements.
-You will also need to have your paperwork in order and be prepared for any questions that come up during the application process, such as how much money you’re looking for and when you plan on repaying it.
-In addition, having a business plan is an essential step toward receiving financing; this document should contain information about your company, its history, and what you hope to accomplish with the loan.
-If possible, try to get endorsements from other business owners or professionals for lenders to see that you have a good reputation within the community/industry.
-In this day and age of online platforms such as Crowdfunding sites like GoFundMe, it’s also essential to think outside the box and explore all of your options before you go ahead and apply for a loan.
There are many things to consider when applying for financing, but you can make the process much easier on yourself with a bit of preparation. Stay positive and don’t give up good things come to those who wait.
A new business has a lot of things to consider, and none is more important than how to finance the business. If you have any questions about business loans or would like to speak to a professional to help create a concise plan, the JaScott team of lending consultants are here to help.
Let us help you get the funding you need! We offer free business consultation services – just ask! Schedule a call with us or call today at (877) 360-7387.