If you are concerned about your business loan being rejected, then you have nothing to worry about. Here you can find out everything you need to know so you can get accepted- first time.
Your Credit Score
One of the main reasons why a lot of businesses have their loan rejected is because their credit score isn’t high enough. If you want to stop this from happening, then it is so important that you focus on getting it as high as you can. This could involve clearing any debt or it may even mean updating your records. When you do, you will then be able to show the bank that you are way more reliable and that you are able to pay back any money that you owe.
Time in Business
If your business is new, then this could really go against you. Business loan requirements can vary so it helps to do your research so you can find a provider that caters to new business owners. Of course, if you have a successful business with very solid financials, then there is no reason why a loan provider would turn you down, but it does help to be on the safe side just in case.
Your Industry
Some industries are seen as being risky, especially with traditional lenders. Restaurants are a prime example of this because they tend to have a very high rate of failure. If your business is operating in a tough industry, then this could go against you. There isn’t much that you can do here. All you can really do is make sure that you are working hard and that you are proving your income where possible.
Collateral
If you want to stop your business from getting rejected for a loan, then you may need to put down a certain amount of collateral. If you are in this situation then it helps to look for alternative sources of financing so that you can secure the loan that you want. Sure, this can be risky, but it can also help you to get your business where it needs to be.
Your Debt Utilisation
Lenders don’t want you to be using more than 30% of your available limit. If you use too much then they may see you as being high risk and this is the last thing that you need. If you want to get around that then it helps to pay off as much debt as you can. You need to do this before you apply for your loan, as it will show that you are able to manage the credit that you have right now. This can be a difficult situation to be in, but most loan providers would be more than happy to tell you what you need to do in order to get to where you need to be.
So, securing a loan doesn’t need to be difficult, and by following these top tips, you can be sure to make the most out of your business finances.
