When to Turn to Alternative Business Financing

Alternative business financing is growing at a rapid rate and for good reason.  Businesses are finding it harder than ever to get a conventional bank to approve their loan.

The worst part is, most conventional banks will take 2 months just to tell you that your business loan had been denied.  We put together a list of the top 5 reasons why most banks will not approve your loan.

If your business falls into any one of the 5 below categories, it may be time to look for alternative business financing options.

Bad Credit

bad credit business loans

Banks are looking at both business and personal credit when reviewing applications.  If you have any of the following, chances are your bank loans will get declined.

  • Tax Liens
  • Late Payments on any Accounts
  • Maxed Out on Credit
  • Credit Score Below 660
  • Collections
  • Judgments
  • Foreclosures
  • Loan Modifications
  • Previous Bankruptcies
  • Short Sales

Minimal Time In Business

time in business

Typically a bank likes to see that you have owned your business anywhere between 2-5 years.  There is a good chance that your bank will deny your loan if your company hasn’t been around for that long.

Showing Losses On Tax Returns & Financial Statements

showing losses on tax returns

If your business is showing a loss on your tax return or a small profit, getting a bank loan can be difficult.  In addition, it can be challenging if you haven’t filed your most recent year’s business tax returns.

Cash-Flow Issues

cash-flow disruptions

Having negative balances in your business checking accounts can be a red flag if you are applying for a business loan.  Even a few can raise an underwriter’s concern.

Not Having Enough Collateral 

real estate collateral

Most conventional bank loans require some form of collateral.  Not all businesses have enough collateral in order to get approved for the amount that they are looking for.

Compensating Factors

National Business Capital

As a bonus, we have included compensating factors that National Business Capital & Services (National) utilizes for all of it’s applicants in determining whether or not that business will qualify to get the financing it needs.

Even if your business has any of the above mentioned issues, National will give any applicant positive consideration by:

  • Reviewing the company’s online reputation and read customer reviews.
  • Social Media Review to see how active a business is with their page see how responsive their customer base is to the page.
  • Having an in depth conversation to better understand why the business may have went through a difficult time.
  • Reviewing sales consistency of the company to help understand the trend of the business.

We Are Here For You And Your Business

business financing advisors

National offers business financing to small-, medium- and large-sized businesses nationwide – and works with all types of businesses, no matter the credit history.

When you choose National, you will enjoy zero upfront fees, approval within 24 hours and alternative business funding within days, not weeks.  We are extremely proud of our 90% approval rate.

Our simple 1-minute application will help your business obtain the business financing it needs.  To fill out an application or for more information, please click here.

Do you have questions about alternative business financing, alternative business funding, or small business loans?  Please feel free to give us a call at (877) 482-3008.

About the Author, Megan Capobianco
Megan Capobianco is the Marketing Manager at National Business Capital. Megan is passionate about helping business owners along their journey - providing them with relevant content they can use in their day-to-day operations.