Your Bank Denied Your Loan Application…Now What?
A large portion of Canadian business owners have had the following experience. They have run their businesses with some success and are looking to take things to the next level. In order to boost profits by increasing sales, beginning expansion and/or launching new advertising campaigns, they decide to contact their trusty banks. After speaking with loan officers to discuss the ins and outs of applying for business loans, they eventually hand in their completed loan applications.
After some time – usually more time than expected – they finally receive responses. They’ve been denied. Then comes the states of confusion mixed with anger. The following questions are asked. What went wrong? Why wasn’t I approved? What do I do now? How will my business grow from here? Have you endured this experience?
Do you lack a history of making profits?
Loan officers at banks are known for their detective-like tendencies. It’s their jobs to delve into your company’s history in order to determine just how viable it is. Does this company have a history of turning a profit? Are they good for the money if we loan it to them? Does the business owner have good credit? Does he/she have any collateral to put on the line? If the answers to these questions fall into the negative, your chances of getting a loan approved are next to none.
“Banks look at an application like this: If we gave them that money today, could they make the payments based on their cash flow from last year?” explains Gary Groff on New Hope Network, “Companies often want us to make a loan based on their projections. If they can demonstrate why the profit is going to be greater—say, they just signed a new contract with Whole Foods—we’ll consider it.”
Are you already in debt?
You don’t already owe other institutions a lot of money, do you? Loan officers will be looking into this as well. We’re talking about something as simple as an outstanding balance on your credit card. In addition to your company’s financial history, your personal financial history is bound to be studied. As Ricky Baizas details on LoanMe.com, personal loan applicants who are saddled with excessive debt often find their loan applications denied by traditional lenders.
“Perhaps the applicant has taken on recent debt in the form of a car loan, a mortgage or a student loan,” he writes, “Rapid changes in the applicant’s debt profile can make lending banks uneasy about extending additional credit. In some instances, reapplying within a few months following the first loan application may prove successful as it allows the applicant time to establish trustworthiness.”
What other funding options exist if your bank denies your loan application?
Synergy Merchants’ unique merchant cash advance program has funded many a Canadian business owner who has been denied by his/her bank. A merchant cash advance is not a loan. Therefore, the application process is quick, simple and without any need for even a credit check! Learn all about it by calling us at 1-877-718-2026 or emailing us at email@example.com. You can also apply online for a free, no obligation quote!