08/03/2021
Consider alternative financing
So, when a bank declines a loan request for your small business, what is the solution? One of the best available options is alternative funding.
Alternative funding, which comes from non-bank entities that specialize in lending funds to small- and medium-sized businesses, exists in several different solutions that allow lenders to create flexible terms for owners who need access to capital for growing businesses. These are some options:
Merchant cash advances
This is a business cash advance program that provides you with a sum of capital by purchasing a set amount of your future credit/debit card sales. Instead of making fixed monthly payments, MCAs work with your natural cash flow, automatically deducting a small percentage from your credit/debit card sales until the cash advance is repaid in full.
Business loans
These non-traditional loans are designed to make financing accessible to a range of small businesses. Loans in the industry vary in amount. For example, a mom-and-pop shop may need $5,000 or a rapidly expanding business might be looking for $500,000.
It's becoming increasingly difficult for small business owners to secure funding through a bank. Here are 10 reasons why banks are declining loan requests from small business owners.