What do you do next?
If a low credit score is the reason you are turned down, review your score and take steps to repair it. It is a good idea to brush up on what goes in to your personal and business credit score, too, so you understand how you are being evaluated. If you have a successful business, but had to damage your personal credit to build it, you are not alone. Take heart: there are more options out there for you than ever before.
On the other hand, if you don’t have any debt, or lack a history of using credit responsibly, that can count against you, too. Make sure to keep track of your total credit limits, including business credit cards, personal credit cards, lines of credit, and other credit sources, and maintain a reasonable debt usage.Cash flow is one of the first things lenders look at when deciding whether to approve a small business loan.
Review your financial projections and business plan to make sure you are not underestimating the amount of capital you need. Perhaps you can apply again and ask for a larger sum. If you don’t need more than you already asked for, look for an alternative financing source, such as a micro-lender or invoice-based financing option that can make smaller loans. Consider options beyond loans, too, if you need funding but don’t need a large lump sum, like a small business line of credit.