Bank Turn You Down For A Business Loan? Here's How You Can Get Alternative Funding

Bank Turn You Down For A Business Loan? Here's How You Can Get Alternative Funding
Caitlyn Rose
on March 17, 2020
Read in 2 min

If you’re like most small business owners, your first stop for financing needs might be your local bank.

Unfortunately, the lending criteria for most traditional banks excludes many qualified applicants.

It may be because your credit rating doesn’t meet their parameters, but there can be other factors as well.

Traditional banks are often unwilling to extend small amounts of credit, meaning the mom-and-pop stores borrowing anything shy of a million dollars are considered ‘unprofitable.’

If you’ve been rejected by your bank, you might be wondering where to turn next for your business loan.

Ditch the Big Bank

That’s right… forget about the bank for your business loan.

The good news?

There are plenty of online lenders with special loan approval terms and different types of loans for small businesses like yours.

These alternatives to traditional lending often specialize in cash flow solutions for small businesses like yours, instead of catering their business model to the 1%.

Credit rating or loan size are not as important as proving that you have the ability to pay… a relief for small business owners suffering with bad credit.

Invoice or Inventory Financing

Probably one of the most prominent challenges for small business owners is difficulty bridging their frequent cash flow gaps.

It can be difficult to find the money you need to grow your company when you are waiting 30-90 days for customers to pay their invoices.

And if you rely on inventory turn as part of your sales cycle, the last thing you need are purchase orders on-hand for inventory you don’t have yet.

In circumstances like these, alternative lenders will allow you to use the invoices or invoice factoring for a loan and receive the financing you need to bridge your cash flow gap.

Invoice financing lenders typically will want to look at your operations, accounts receivables, and purchase order records.

Merchant Cash Advance Loans

If you have bad credit but regular credit card sales, a merchant cash advance loan can change everything!

Basically, the lender will give you a lump sum which you can use for any business purpose.

The loan is repaid with a percentage of all merchant sales that you make, so there is no fixed payment due each month.

When you make money, the lender gets paid.

In order to get a merchant cash advance loan, you’ll need to provide several months history of your merchant sales.

You should know, however, that the fees and interest associated with these loans can be quite high if your loan is repaid slowly.

Additionally, the term for repayment of merchant cash advance loans is relatively short.

You would be wise to calculate ahead of time what percentage of your sales will be swept to pay it back.

Remember: You Aren’t Alone

Since alternative lenders specialize in innovative business loans, it’s in their best interest to get to know you.

It can be overwhelming to keep your business running smoothly while doing all the research to hunt down the right lenders.

Not to mention all the time spent and sensitive information shared with each loan application could be handled more efficiently.

Fortunately, there are companies that’ll do the work for you. allows you to complete one secure application to compare several different loans and lenders at once.

Even if traditional banks have left you disappointed and frustrated, you’re sure to find the financing you need to take your business to the next level.

Caitlyn Rose Finance Journalist

Caitlyn is a business consultant and writer with an intimate understanding of business finance.

An entrepreneur at heart, she supports small local businesses whenever she can.

Important Disclosures. Please Read Carefully.

Persons facing serious financial difficulties should consider other alternatives or should seek out professional financial advice. This website is not an offer to lend. is not a lender or lending partner and does not make loan or credit decisions. connects interested persons with a lender or lending partner from its network of approved lenders and lending partners. does not control and is not responsible for the actions or inactions of any lender or lending partner, is not an agent, representative or broker of any lender or lending partner, and does not endorse any lender or lending partner. receives compensation from its lenders and lending partners, often based on a ping-tree model similar to Google AdWords where the highest available bidder is connected to the consumer. Regardless,’s service is always free to you. This service is not available in all states. If you request to connect with a lender or lending partner in a particular state where such loans are prohibited, or in a location where does not have an available lender or lending partner, you will not be connected to a lender or lending partner. You are urged to read and understand the terms of any loan offered by any lender or lending partner, and to reject any particular loan offer that you cannot afford to repay or that includes terms that are not acceptable to you. By submitting your information via this website, you are authorizing and/or lenders and lending partners in its network or other intermediaries to do a credit check, which may include verifying your social security number, driver license number or other identification, and a review of your creditworthiness. Credit checks are usually performed by one of the major credit bureaus such as Experian, Equifax and Trans Union, but also may include alternative credit bureaus such as Teletrack, DP Bureau or others. You also authorize to share your information and credit history with its network of approved lenders and lending partners. For qualified consumers, our lenders offer loans with an Annual Percentage Rate (APR) of 35.99% and below. For qualified consumers, the maximum APR (including the interest rates plus fees and other costs) is 35.99%. All loans are subject to the lender’s approval based on its own unique underwriting criteria. Example: Loan Amount: $4,300.00, Annual Percentage Rate: 35.99%. Number of Monthly Payments: 30. Monthly Payment Amount: $219.36. Total Amount Payable: $6,581.78 Loans include a minimum repayment plan of 12 months and a maximum repayment plan of 30 months. In some cases, you may be given the option of obtaining a loan from a tribal lender. Tribal lenders are subject to tribal and certain federal laws while being immune from state law including usury caps. If you are connected to a tribal lender, please understand that the tribal lender’s rates and fees may be higher than state-licensed lenders. Additionally, tribal lenders may require you to agree to resolve any disputes in a tribal jurisdiction. You are urged to read and understand the terms of any loan offered by any lender, whether tribal or state-licensed, and to reject any particular loan offer that you cannot afford to repay or that includes terms that are not acceptable to you.

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Late Payments Hurt Your Credit Score

Please be aware that missing a payment or making a late payment can negatively impact your credit score. To protect yourself and your credit history, make sure you only accept loan terms that you can afford to repay. If you cannot make a payment on time, you should contact your lenders and lending partners immediately and discuss how to handle late payments.