Canadian business owners get their business loan applications denied all the time. It’s pretty much become commonplace for entrepreneurs to learn that their requests have been turned down. But what is the real reason it’s so tough to secure loans from banks? The truth is that there are a variety of reasons. And they all depend on the business owner applying for the loan.
Were you well prepared for your business loan request?
Before you apply for a bank loan, you have a lot of homework to do. Generally speaking, you’ll need to enter your meeting with your loan officer with a detailed business plan, financial statements, projections, credit reports, tax returns and bank statements. If it sounds like a lot of work…you’re right, it is! Unprepared business owners who go into their banks looking for money are generally unsuccessful.
Do you have bad credit?
Banks usually look at a person’s personal and business credit scores to make their lending decisions. If you have a low credit score, the chances of you getting approved for a loan are very slim. There are a number of reasons your credit score may be low. A reported bankruptcy or having made late or missed payments to lenders, credit card issuers and vendors are two of those reasons. As well, some businesses are just too new to have established any credit history.
Do you have any collateral?
Not only do banks check your credit, but they need to check if you have anything of worth that they can hold on to in the event that you’re unable to pay back your loan. Collateral can come in the form of your physical property – your home, for example. However, if you have no collateral to put up, your bank may not be willing to loan you the money you need to grow your business.
Are you making enough cash?
How much money are you currently pulling in? Are you able to comfortably cover your rent, payroll, inventory and other costs associated with your business? If you’re having a tough time keeping enough cash in your bank account, banks begin to worry. Among their primary concerns is your ability to make the monthly minimum payments that are required when you’re borrowing their money.
Synergy Merchants’ unique merchant cash advance program presents none of the obstacles put up by most banks. And, therefore, none of the above mentioned reasons for bank loan denial come into play when clients come to us looking for funding to grow their businesses. We require no credit checks or collateral. And because we require no minimum monthly payments to repay our cash advances, we don’t need to dig into your financial history.
Instead, we simply review your company’s monthly credit card and debit card sales to determine an average of how much money you’re making via these transactions. Based on this number, we offer you an advance – not a loan – which is essentially a purchase of your future credit card and debit card sales. And the advance is paid back through a small percentage of your future credit card and debit card sales.
Find out how easy it is to be approved for our merchant cash advance program by calling Synergy Merchants at 1-877-718-2026 or emailing us at firstname.lastname@example.org.