Small Business Loans from the government are one of the best financing options for small businesses. However, because of this, many small businesses apply for them and the acceptance rate is low. But don’t lose hope! 504 Capital, a small business financing company in NC, MD, and VA is here to help you strengthen your application and get accepted in no time.
Determine Why You Were Rejected
The first step towards strengthening your application for small business financing in VA, is to determine why you were rejected in the first place. There are many factors that determine whether or not you qualify and any number of them can be used to deny your loan.
You should receive a list of reason(s) for your loan denial. If you did not, you can contact the lending institution and ask for a reason. Some of the main reasons people are denied are because of:
- Low personal or business credit score
- Issues with the applicant (criminal record, defaulted on a previous loan, have a tax lien)
- Not enough collateral (assets don’t cover the lender’s losses)
- Not enough revenue or capital to repay the loan
- Low capacity to repay debt (another loan)
- Limitations on loans prevent you from being a recipient (the loan you applied for is not for your industry)
- Inadequate or unsupported sales forecasts and income projections
Strengthen Your Application
After you determine the reason you were denied the SBA loan, you can then work on it and try to increase your chances of being approved. This can include things such as
- Increasing your credit score
- Increase your collateral (work on obtaining more assets for the business)
- Try to increase your business’ revenue
- Pay down an existing loan
If your application was denied because of paperwork errors, it is always a good idea to work with the lender to ensure you have all the proper documents. Once you feel you are in a better position to be accepted for the loan, apply for the loan again.
Apply Again or to Other Loans
Once you receive your rejection letter, you are able to apply for an SBA loan again after 90 days. There are three main types of SBA loans including a 7(a) loan, a 504(cdc) loan, or a Microloan. If you were denied one of these loans, you can always try to pursue a different one that is more suitable to your needs.
Similarly, if you don’t want to re-apply to the same loan, and you don’t want to apply to any of the other SBA loans, you can always look into other financing options. This can include hard money lenders, business credit cards, or even an online lender.
Small Business Financing in NC, MD, and VA
Applying for an SBA loan can be nerve-wracking and tricky. Make sure you are prepared and have a team of professionals on your side by applying to 504 Capital. We are here to help your business grow and we want to help as many businesses as we can.
If you are looking for small business financing in MD, or small business financing in VA, 504 Capital is here to help. Visit our website or call us (757) 623-2691, to see how you can qualify for an SBA 504 loan today!