It may seem like your bank does not want to lend, but in actuality banks only make money when they lend so they can charge interest. The problem is that conventional lending, unlike other forms of lending like merchant cash advance lenders, has to follow strict guidelines to make sure that they’ll get repaid. That an often mean that they will want a spotless credit history, some collateral for the loan, or a personal guarantee for a business loan. It’s up to you to come up with whatever they need to secure the loan. They really do want to lend out money, they just want to be convinced you’re the right person to lend it to.
Be Prepared
If you already know you have a bad credit history, then you need to fix that before you attempt to borrow from conventional channels. Alternative lenders are out there who will let you borrow money despite your personal credit history, but it will cost you more money in finance changes. Make sure you have a written business plan, and find out what type of collateral you can offer to secure the loan. Without any of these three, the odds of getting a loan through a conventional bank are low.
Qualify for Special Programs
There are various small business programs being backed by the Small Business Administration (SBA) to target specific demographics like community businesses, or minority, women, or veteran-owned businesses. If you think you fit into a special demographic, you can get more lenient lending terms with less need for collateral since the SBA is backing the loan. It always pays to know what new programs are coming out and if you can get involved to be the first in line when funds become available for lending to these demographics. It can provide an easier way to get conventional funding without having to meet stringent criteria that might knock you out of the competition for these funds.
