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Still Can’t Get A Business Loan?

Guest post by: Joseph Lizio

Article Overview: Most small businesses still can’t seem to get that needed business loan. Well, if what you are doing is not working, try something else. Here’s why.

Still Can’t Get A Business Loan?

It is no surprise that small businesses just can't find the financing they need in today's market. The New Year is still on track to bring tons of uncertainty as banks are still hoarding their cash reserves and our government is more concerned about politics than economics. Not a great market to be a small business trying to raise capital. However, while this is a tough market for traditional business loans, there are a few alternatives that are flourishing and actually helping many small businesses survive and grow in this sluggish economy.

There are a few factors that need to be followed in today's economy to secure capital for your small business.

First, if what you are doing is not working, quit doing it and try something different.

There is no point in continually hitting your head against a wall - a wall that will not budge. In order to try something different, you must first start researching and understanding the numerous other options that are open to small or growing businesses - then pursue the best option available to you and your business. Sounds simple and it really is. Much better to use your time and energy looking for ways that will actually work for financing your business then it is to continuously fight against the currents. Banks and other lenders are not going to change their policies for you; so, you have to change your business or where you look for capital if you want to succeed in this market.

It might not seem right - but, it is what it is.

Second, get creative. If the banks are saying "no" then look for other lenders or capital providers that say "yes". There still remains a lot of money in this economy from personal wealth to private investment - money that can be tapped for the right deal.

Banks and other financial intermediaries are only paying fractions of a percentage for deposits or CDs - making it not the "go to" market for excess cash. This means that those with extra capital are seeking new ways to employ those funds for better earnings (instead of just letting that cash sit in bank vaults). So, find ways for your business to tap into those idle funds.

You can get out and network in your community. Ask people for a loan or investment. They may have not yet considered this option until you mention it to them - offer returns for their funds at levels that they could not get elsewhere. If banks are offering one-half of one percentage then offer 5% or more. Not only will this entice them to look at your business but will also compensate them for their risk.

Know that there are many other self-made persons or other business owners in your area that like to invest locally - it is their way of giving back.

Further, there are new alternative (non-bank) private lending companies that, unlike the banks, actually want to work with your business and have designed loan programs that not only work for them but that can benefit your business as well.

Or, you can piece your financing needs together. More times than not, most new or young business owners think that their best financing scheme is to get an all-inclusive business loan - a single loan to meet all of their financing needs; saving both time and effort. But, this is just not the case today. Asking for too much at one time can create many new problems - like putting your loan request over the limit the lender is comfortable with or authorized to make or makes the deal just to complex for a lender in terms of valuing different collateral or matching different needs with different risks and terms - making it all too easy for the lender to walk away in search of easier bounty.

If the banks are not lending because there is just too much risk in the market which correlates to too much risk for individual businesses - then find ways to remove or mitigate your perceived risk in the eyes of the lender (bank or private lender). This mean either reducing the lending risk in your business or seeking alternative markets for raising needed capital.

Finding capital in this market is not easy or at least the traditional ways are not easy for new or growing businesses. But, that does not have to stop you. You are an entrepreneur after all and entrepreneurs find ways to get things done - even finding capital in bad lending markets.

So, if you still can't get a business loan, all it takes is a willingness to stop doing what has already proven not to work and put those efforts into finding ways that do work - it really is that simple and it starts with you.

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Article Tags: business, capital, credit, financing, loan



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