Business Loan Application Denied

How to get money now for your business

Having a business loan application denied can be a trying time for a lot of new businesses. The reasons are fairly obvious; a business loan provides an excellent source of income usually at reasonable rates. Having your business loan application denied, though, doesn't have to necessarily be the end of the line because there are still several options available that you might want to consider.

Friends and family

Borrowing from friends and family may not seem like the ideal solution and there are certainly a few things you have to think about before you start trying to persuade your nearest and dearest to lend you thousands. One huge advantage is the cost of the loan. Most friends or family members will not charge you interest and if they do, there's a very good chance it would be less than the bank demands. However, the pitfalls include arguments with your friends and if you are unable to repay the money for any reason it can cause a serious breakdown in relationships.

Credit Cards

Credit cards generally prove to be expensive, but you are more likely to be accepted than with a business loan. In the event that you've had a business loan application denied this is a fairly sensible next step. Prudent, frugal spending is required in order to ensure you don't run up hefty credit card bills.

Cutting organisational costs

If you are unable to borrow money at all, then it is time to start cutting costs within your organisation. There are many ways to do this. Regrettably, redundancies or waiting before employing new staff is one way to do it. However, that still leaves work that needs completing. Consider employing part time or outsource projects to freelance contractors. Leasing office or manufacturing equipment is much cheaper in the short run than buying the same equipment. If you've had a business loan application denied and you intended to use the money to buy machinery then lease and consider the benefit that you will be able to upgrade further down the line.