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 January 7, 2016
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 small business consultant and editor for LendGenius with an intimate understanding of business finance.

She’s an entrepreneur at heart & supports local businesses whenever she can.


2018 Tax Audit Triggers Business Owners Need to Know

by Amy Fontinelle on February 16, 2018
While the overall risk of an individual tax audit is low, the odds go up when you file a business… Read more

How Your Tax Strategies Can Affect Getting a Business Loan

by Caitlyn Rose on January 3, 2018
Traditional banks are increasingly wary of lending to small businesses because it's simply not profitable enough. Instead, they go after the… Read more

Low-Interest Loans & Where To Find Them

by Dustin Clendenen on December 15, 2017
Sometimes we fall behind on our credit card payments, and those high APRs can start to take a real toll… Read more

How to Get a Loan In 2018 (The Easy Way)

by Rebecca Hosley on December 6, 2017
Applying for a loan can be confusing if you've never done it before, or if it's been a while (technology… Read more

9 Techniques for Managing Seasonal Sales Fluctuations

by Jackie Lam on September 8, 2017
If you’re a small business owner whose cash flow is affected by seasonal sales — we’re talking seasonal companies like… Read more

Amazon Lending – A Comprehensive Resource on Business Loans from Amazon

by Caitlyn Rose on August 14, 2017
The Amazon Marketplace has quickly become a go-to channel for both large and small businesses looking to develop an online… Read more

7 Basic Business Loan Requirements – Know What Lenders Are Looking For

by Rissa Ann on August 5, 2017
There are more ways than ever to fund a business launch, expansion, or unanticipated expense, but business loan requirements can… Read more

The 5 C’s of Credit Deciding Your Business Fate

by Amy Fontinelle on May 8, 2017
When it comes to small business loans, success is spelled with the 5 c's of credit. We know, applying for… Read more

How to Sell to Millennials in 2018 – What is a Millennial Person Thinking?

by Brenna Lemieux on May 5, 2017
With Gen Y collapsing under it's own debt, learning how to sell to millennials may not be your highest priority for… Read more

5 Types of Grants For Women-Owned Businesses

by Caitlyn Rose on December 29, 2015
If you are a woman thinking about starting a small business, you are part of a growing trend. Since 1997,… Read more
Join For Free & Start Browsing Loans