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5 Reasons Bussiness Are Rejected For Short Term Business Loans


Looking for small business loans? Check this presentation to make your loan application strong. Know the top 5 reasons why your business loan application may be denied. Visit today – PowerPoint PPT presentation

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Title: 5 Reasons Bussiness Are Rejected For Short Term Business Loans

5 Top Reasons Behind The Small Business Loans
  • It can be a challenge for small business owners
    when discussing with the banks for acquiring a
    business finance or short term business loans .
  • As per a recent study, around 50 to 55 of small
    business owners nationwide successfully obtained
    probable finance and loan packages of the sum
    requested over the past one year.

Top 5 Reasons Behind the Rejection of Small
Business loans are as follows
  • No Preparation
  • Looking for Small Loans
  • Poor Cash Flow
  • Bad Credit/ No Credit
  • Lack of Collateral

No Preparation
  • Some business owners are rejected for a loan
    and the simplest example is that they have failed
    to follow the set procedure. Some business owners
    arent aware of the application procedure and
    think that they can just walk into a bank, fill
    out a form and walk out with a bag full of cash.
  • Unluckily the procedure is somewhat more
    intricate and there is a long list of
    comprehensive criteria that small business owners
    need to meet to get a Fast Cash loan request

Continue.....No Preparation
  • Prior to applying for a short term business
    loan, businesses will require submitting the
    latest up-to-date written business plan, a period
    of bank statements, comprehensive financial
    statements, personal and business credit reports,
    tax returns etc.
  • They must also have copies of applicable legal
    documents that include contracts, leases and any
    applicable licenses and permits etc.

Looking For Small Loans
  • It is documented fact that many small
    businesses put in their applications for medium
    sized loans totalling less than 100,000
    regrettably, in this respect, banks want to
    finance bigger loans because its more profitable
    for them.
  • To process a 60,000 loan and a 1 million
    loan, it costs the bank around the same amount
    however, the 1 million loan will make a greater
    return and so it is more profitable for the bank.
  • Thus, small business owners should be
    conscious that a loan request should be as
    sizeable as possible, obviously within the sphere
    of possibility in terms of meeting a repayment
    plan on a timely and regular basis.

Poor Cash Flow
  • Suppose your business has a very tight margin
    then it is recommended to work toward reducing
    expenses or finding ways to make revenue and
    strengthen a credit report prior to applying for
    a small business loan.
  • For similar businesses, cash flow will always
    be a challenge the right timing of discussing
    with a lending centre or traditional bank will be
    influential in negotiating a positive outcome.

Bad Credit/ No Credit
  • A credit score is a measure of overall credit
    worth of an individual or a business. Generally
    its very much hard to get bad credit loans for
  • Before coming to lending decisions and/or
    setting interest rates, banks predictably will
    inspect both personal and business credit scores.
    Failed or late payments or a period of bankruptcy
    etc. will result in a low credit score.

Continue.....Bad Credit/ No Credit
  • In some cases, a small business may simply be
    too new to demonstrate adequate credit history to
    qualify for a business loan.
  • To improve your credit scores, it is
    recommended to spend prudently under the credit
    limit, make regular timely payments as well as
    uphold existing accounts in a good financial

Lack of Collateral
  • Conventional banks usually need a type of
    collateral, possibly a piece of property, which
    can act as a guarantee for a loan in the event of
    failed or slow repayment. The bank may be
    reluctant or hesitant to commit to a finance
    package or loan wherein small businesses dont
    have significant real estate property or
    equipment to provide as a type of collateral.
  • Homes and cars are the regularly accepted
    forms of collateral by the traditional banks.
    Predictably the amount a bank will loan relies
    upon the total worth of the asset(s). If the
    small business owner doesnt have enough asset(s)
    which the bank regards to be of adequate high
    value, the probabilities of obtaining a small
    business loan will not materialise.

Pawnbrokers Can Assist Small Businesses Even If
You Have Bad Credit
Small businesses can still get same day business
loans from reputed pawnbrokers or pawn shops!
Based in Sydney, Cash Fast Loans is a trusted car
pawnbroker and moneylender who provide short-term
business loans without any credit checks. Get
detailed idea about The Significance of Instant
Short-Term Cash Loans.
Contact Us
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10 North Rocks Rd, North Parramatta, NSW 2151
1300 227 432
Phone No
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