The Steps to Take If Your Business Is Denied Funding

Whether you are applying for a loan to fund an existing business or start a new one, getting a ‘no’ from the lender can be demoralizing. It can feel like your dreams have been crushed, but this shouldn’t keep you from moving on. In business you have to get used to getting some rejection now and then. There will always be some customers who say no to your products, investors who won’t approve of your plan and sadly, lenders who won’t approve a loan when you need it most. To succeed you have to persevere and keep on going after rejection. This article highlights some of the steps you should take when your business is denied funding.

Know Why You Were Not Approved

The first step is to find out why your loan application was not approved. The information you get from the loan officer will be useful when reapplying or applying for loans in the future. This is a great opportunity to learn what banks and other lenders look for when reviewing loan applications. Some of the key factors that lenders evaluate when making a decision include credit score, existing funding and revenue. Get all the specific details as they will be helpful in deciding which step to take next. Don’t hesitate to ask for clarification if the letter issued does not go into the specifics.

Reapply If the Lender Gives You That Option

At times, a loan maybe denied because of some simple mistakes you made on your application or failure to provide all the documentation. If it is something that can be corrected, correct the errors and submit your application for review. Also, your loan could have been denied because you asked for an amount higher than you qualify for. In such a case, you can review the amount and submit your application again. However, if what the lender is offering is too little to meet your needs, check out other lenders before reapplying.

Apply with Other Lenders

Getting a no from one lender does not mean that you will be denied funding by all the others. Therefore, don’t give up so easily. With the right research, you can find a lender who is willing to fund your business. A quick way to find a lender for your business is to make use of online platforms such as Lending Express that match businesses with lenders. Through the Lending Express website, you can submit your application and get multiple loan options to compare. Lending Express is a technology company offering services that match small and medium businesses to potential lenders.

Work on Your Credit Score

If your credit score was the reason you were denied a loan, you should work to raise it. You can improve your business credit score by paying your bills and creditors on time, limiting your debt, and using credit over and over again but paying on time.

When you are denied a loan, review your application and reapply or explore other options. For the sake of future financing, work on your personal and business credit scores and also look for ways to boost your revenue.