With 2022 just a few days away, the Synergy Merchants team would like to take this opportunity to wish everyone a very happy new year! Here’s hoping that 2022 is your most prosperous year yet. This wish especially goes out to every business owner who has endured significant hardships in the wake of the pandemic. Needless to say, COVID-19 has been tough on all of us.
Sadly, many business owners were forced to shut their doors permanently. Their companies were unable to endure the many restrictions brought on by the pandemic. For many other business owners, securing business funding was made impossible. Their banks turned them down even after many years of solid patronage. What should you do after being declined for a business loan?
Try to improve your credit score.
A poor credit score is a top reason why so many business owners have had their business loan applications denied. If you have had trouble making payments to other lenders in the past, a new lender will not likely trust you. Banks need to ensure that their loans will be paid back in timely manners. Over the next year, it would be wise to pay off any outstanding debts to keep all of your accounts in good standing.
“If you have a low credit score, you might not have met the lenders requirements, thus your reason for getting declined,” reports Fora Financial, “In addition to personal credit scores, lenders also evaluate business credit history when deciding whether to grant a loan. They do this because by reviewing your personal and business credit scores, they can get a clear picture of your finances.”
Better your cash flow.
Have you been able to demonstrate that your business can be run smoothly with the cash it has on hand? Are you able to pay your employees with ease? Can you easily purchase materials and supplies without hurting your bottom line? Showcasing an ability to maintain a good cash flow is an important part of securing funding from a bank. As TRUiC points out, having a poor cash flow is a top reason banks decline business loan applications.
“Cash flow always determines the success of your business, and if you have a spotty cash flow, lenders can easily deny your loan application,” their website affirms, “To improve our cash flow, examine and improve your cash management skills.”
Apply for a different financing option.
“If your business is struggling with working capital, a term loan may not be your best bet,” says Fora Financial, “You may find the lender is willing to provide you with a smaller line of revolving credit instead. Lines of credit are generally easier to qualify for than term loans given their short-term nature. Other loan products may also be easier to obtain. For example, you could leverage your firm’s future credit card receipts to secure a merchant cash advance.”
At Synergy Merchants, we couldn’t agree more! Our unique merchant cash advance program enables all types of business owners to get their hands on much-needed extra working capital. Regardless of your credit history or length of time in business, you can be approved in less than 24 hours!