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77% of small businesses that apply for a loan from a large bank get rejected.
It’s discouraging getting rejected by a large bank, especially when your new business is in need of financing. A single rejection letter can feel like the end of the road.
But there’s no need to fear. There are several financing options to consider when you need the funds to get your company off of the ground.
Below is a guide on several business financing options to give a shot.
SBA Loans
For small businesses, one of the best sources of business financing help are loans from the U.S. Small Business Administration.
This business financing option is great for companies that don’t meet the ultra-strict criteria created by large banking corporations. However, you will still need a good credit score and at least 2 years of business history.
The application process for SBA loans does require tons of paperwork and documentation. Start your application as soon as possible, put your best business management skills forward to keep organized.
Online Loans
Is your personal credit a bit questionable? Financing a business may seem impossible with shaky credit, but applying for online loans is a great option.
Online lenders have soared in popularity due to their accessibility and fast turnaround times. Some online lenders can have cash in your wallet in 24 hours!
When selecting an online lender, don’t rush your decision too much. You may need the cash for a business emergency but read through each lender’s criteria and rates.
Bank Loans
Even though securing a loan from a major bank is intimidating, it’s still an option. However, you will need strong credit and business history to get approved.
Applying for a bank loan is even a great place to get started, even if you aren’t approved. You’ll see where your credit is and areas of improvement.
While you’re in contact with a bank, ask about the necessary application documents you’ll need for your other options. They should be able to point you in the right direction.
Creative Options
When learning how to finance a business, don’t forget about your more creative options!
You can use a crowdfunding platform to share your business idea and attract donors. Don’t underestimate the power of a shared social media post.
Many business owners have also held fundraisers and small events to raise money for their businesses.
Choosing the Best Business Financing Option
Is your business in need of funds? Weighing different business financing options is overwhelming, but our above guide offers a helpful look into various loans.
No matter which option you select, always be prepared with the needed documents. Work with a financial and/or business advisor if you’re in need of an extra hand.
Speaking of a helping hand, Sterling Tax & Accounting is a trusted name within the Sarasota area. We offer a variety of financial solutions, including bookkeeping services and tax planning. Schedule an appointment with us today.
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