Month: November 2022

Funding is essential to running a small business. Whether you’re just starting out or looking to grow, having the right financing can be the difference between success and failure. Still, it can be hard to obtain funding. According to a 2020 estimate, nearly four out of five small businesses were denied loans from big and small banks.¹ 

Being denied financing is scary — especially if you’re trying to keep your doors open during uncertain times. If you’ve been denied, don’t lose hope. There are steps you can take to secure the financing you need.

Determine Why You Weren’t Approved

First, figure out why your application was rejected. Knowing what went wrong can help you identify areas for improvement, strengthening your future applications and boosting your chances of approval. Here are a few common reasons applications are denied.

• Your Credit Score Is Too Low — A damaged or subprime credit score is one of the main reasons applications are rejected. Lenders use this score to gauge your potential to default. Look at your credit score before applying to ensure you meet the lender’s requirements.
  
• Insufficient Cash Flow — If a lender

Running a business takes a lot of careful planning. Occasionally, you may require additional rounds of funding to fully execute your business goals.

Some business owners may pursue loans from different small business lenders. However, loan stacking, or taking out too many loans from separate lenders within a short period, can be risky. Read our guide to learn more about loan stacking and what you can do to avoid it.

Why Is Loan Stacking Risky?

Taking out different loans from various lenders can quickly become very difficult to manage. Handling too many due dates throughout the month can adversely affect your cash flow and the ability to save for the future.

Additionally, if you miss any due dates, you may also run the risk of defaulting on one or more of your business loans. Missed or late payments can negatively affect your credit score, and past-due amounts can become considerably harder to pay off. When you have several different loans from multiple lenders, you may also have a harder time making payment arrangements in case you get behind on your loans.

What Are Some Alternatives to Loan Stacking?

If you’re in need