A lot of business owners are afraid to even try to get a loan, because they are afraid that if they get turned down it will be bad for their business fundability in the future. Nothing ventured, nothing gained is an old adage that fits pretty well here. Yes, it can damage your business credit a bit if you are turned down, but you won't get the advantages of having the extra money if you never apply.
It's not just a Boy Scout motto; it's a business way of life. Always be prepared. Read up on prepping for a loan application within the profit and growth section of the Business Fundability System. You will also find a lot of information on what you can do to get funding for your business if you are turned down for a loan.
Not The End of the World
People get turned down for loans all the time. Whether you are applying for personal loans or business loans, getting turned down is always a possibility. It isn't the end of the world. It's not even the end of the road. You can still go somewhere else, and you may have better luck with a different lender. Before you step out of the first lender's door and walk down the street to the next one, however, take a good long, honest look at your business fundability and the preparation you have done to make sure it really is up to par.
When it Hurts
Do not apply for loan after loan when you keep getting turned down. Just like in your personal credit having too many rejections will begin to weigh you down. Not only will it look worse and worse with each lender you approach, it will also hamper your business relationships and may even hurt you with consumers. Remember that unlike personal credit scores, your business credit report is a matter of public record. Other business often check the business credit of a company they are considering doing business with to make sure they are stable. Savvy consumers are also learning to check into a business' financial stability before getting involved with them as well. Keep your record as clean as you can.
If you have been turned down by two or three lenders, you can still look for funds through less traditional means. Venture capitalists, private lending from friends or family and even grants may be options for you when your business fundability isn't strong enough to support a bank loan.
Business Credit Reports