4 Steps to Take If You Aren't Approved for an SBA Loan
One of the most famous ways small business owners finance their ventures is through the medium of commercial bank lending. They are offered to businesses at relatively low interest rates as well as flexible repayment terms. SBA Loans are recommended by many financial experts as the best options. However, it is not an easy task to qualify for such loans. The approval process is very stringent. This is the reasons, many applications get declined. Do not worry! There are ways you can improve your chances for the next time.
4 Steps to Take If You Aren't Approved for an SBA Loan
Let us tell you what should be your next steps after your SBA Loan application is not approved. One should follow our below mentioned instructions carefully:
- Determine Why The Application Wasn't Approved: According to the Nav’s Small Business American Dream Gap Report, more than 45% of the applicants are denied financing. Many of which do not understand why it was rejected. This is the reason, you should determine what the cause for rejection was or you will end up making the same mistake the next time. There can be several reasons to this. For example, the lender may not be offering loans to your industry or you may not hold a strong credit score. It will be good if you pin point the issue and work on it. You can request a written letter of explanation from the lender to understand the issues clearly. Find a lender that will give you a chance.
- Improve Your SBA Application & Reapply: After understanding the issues, one shall strengthen their application by showing your financial records and an excellent business plan. Improvement is the key. Pay attention to details; make sure every claim on your application is supported by proper documents. After confirming all this, you should reapply.
- Understand Your Business Credit Score: Many lenders prefer not to finance businesses or business owners that have a weak credit history. This is why; you should keep a keen eye on your personal credit score. You should do necessary research to understand what credit score will be acceptable by the specific lender and check if yours matches it.
- Consider Alternative Business Funding Options: If the issue raised by the lender cannot be fixed in a short span of time and requires long term efforts, you shall opt for other funding options to meet your capital requirements. SBA Loans are not the only option available in the market. You can consult with a financial expert and find the right option for yourselves.
Conclusion: SBA Loans are attractive to businesses but they are not the only option available in the financial market. One can finance their business in many ways. So, do not let a rejection stop you. TI Lending is offering Collateral Free Business Loan in India.
