We hear this statement occasionally; “I was turned down by banks for a business loan, now what to do?”
When an applicant turned down by banks, he/she usually search for other business lenders with different options they offer. Traditional lenders unavoidably search for ways to approve business loans; they usually have the impression of not approving them. You give them one excuse and your loan request is washed out.
However, there are different business loan lenders who quickly get you approved for a business loan request – actually, it’s the lending they all are doing. So, they really search for ways to make business loans. You might be able to secure a business loan from a bank but, if it says no that doesn’t mean your hunt for business loan funding is over.
So, the next big thing is where to look for?
Small business lenders usually lend against cash flow of a business. You might have heard stories regarding bad debt ratios, collateral and credit. Although, if you don’t have a solid business cash flow then there’s a very little chance that you can get a business loan despite the available lenders.
Even traditional lenders when set to underwrite credit, focus a business’s ability to engender enough positive cash flow to form those monthly repayments. If you have more money going in business than out of it, then at minimum they review your loan request. Accordingly it’s imperative to focus on cash flow before applying for a business loan funding.
Now, let’s just say you don’t have a solid cash flow and your business is barely making sales. However, you have some opportunities which will bring in some revenue in few weeks or months. You’ll find many small business loan lenders who’ll lend business loan against those cash flow events.
Let’s discuss this phenomenon with the help of some examples!
You’re a manufacturing business and receive a big order but don’t have enough cash to begin or complete the same. There are financing corporations which will lend your business enough cash to deliver the order on time. Once you get paid after completing the order, you repay the lender.
A business has been making sales regularly but, isn’t profitable yet- that means your business having more cash flowing out of the business then into it being a usual state of affairs for new and growing businesses. The best remedy for this is simply to get a little more cash to shop for a new machine or inventory, launch a brand new promotion campaign or hire trained staff.
Well, you’ll find many lenders that’ll leverage your business’s aptitude to constantly bring in cash flow from your customers – despite your business is lucrative or not, has provided security or not or that meets all those different rigorous criteria that banks use to guarantee business loans.
Few cash advance lenders will lend your business against your credit card sales, few against all customers’ payments together with credit/debit cards, money and check and few against your financial statement that follow your cash flow and not supported by your business’s financial statements.
Therefore, if your loan application is turned down by banks as a result of overall business cash flow troubles, you have the options that will get you access to capital to grow.
First, dig in your business to envisage from where the cash flow is coming. Then search for business loan lenders that’ll offer you business loan based on that cash flow. Also, if you have got future money events that will bring in money to your business and you need quick cash to unlock those potential revenue generating opportunities then search for lenders which will assist you financially against those events.
Among many guiding values of a business, foremost is its talent to leverage its assets and processes to grow. So, why not leverage the same to come up with some cash flow and get a business loan that your small business needs has to achieve your goals despite turning down by banks.