What To Do When Your Application Is Denied.
Getting approved for a loan is a relief. It can cover a lot of expenses. For example, you’ll be able to purchase much-needed office machines, prepare your location to be business-ready, pay salaries and other obligatory bills…just to name a few.
But What Do You Do When You’re Denied?
When your application is denied and financial obligations of vital importance are not met, the result is disappointment and frustration. But it is not the end of the world. There are alternative ways to still get the money you need. You may end up paying a little more in interest depending on what alternative you use, but you will still be able to catch up on business demands.
If you are not born with a silver spoon and have some reserves saved up somewhere, here are alternative ways to get funding when the bank says “NO.”
- Sell some of your personal valuable properties that are easily replaceable, especially if they are worth thousands of dollars. For example, if you have two cars, selling one to raise the funds you need wouldn’t be a bad idea. In the end, you'll be able to purchase a new one when your business picks up.
CAUTION: Do NOT sell items that have sentimental value to you especially if they hard to replace. - If you have a good, trusted relationship with a family member or close friend who’s in a position to give you a loan, it’s a good option. Depending on the relationship, you will either have to pay back with no interest, less interest or part of it will be written off. Don’t destroy the trust. Pay back on the agreed terms.
- The internet has made it a little easier for business owners who don’t have a collateral but still need extra cash. If you are really desperate and have no other way, borrowing from Online lenders is an alternative. Understand however, that this type of loan comes with very high interest rates and can put you in a financial bind if things don’t work out. Personally, it is advisable to only go that route when all else fails.
- Getting a loan from microlenders is another alternative. Generally, because they are non-profit companies, they mostly catered to small businesses. If you need a loan to take care of some urgent business needs, they may be another alternative. Keep in mind however, that their APR is also higher than the banks, just like Online lenders.
Although all of the above is less stressful compared to the banks, they all have their pros and their cons. Do your research, choose wisely and honor the terms of whatever option worked out for you, and you will be in good shape the next time you need help.
