You’ve Been Denied a Small Business Loan – Now What?

Getting financing as a small business can seem like an uphill battle and can be a challenge if your business is still in its infancy. However, there are tons of opportunities out there for business owners, and the lending landscape has never been as diverse as it is now. There are also things that you can do as an owner to make your business more attractive to financiers. Here’s what you should do if you’ve been turned down for small business financing.

Know Why You Were Turned Down

The first thing you should do is to know why you were turned down in the first place. Knowing why you were rejected is the only way to make the proper corrections and improve your chances the next time around.

The easiest way to know why you were rejected is to simply ask them. A letter of explanation will lay down in clear terms what went wrong. You can then go back to the drawing table and start looking at other options.

Look for Alternative Lenders

Traditional banks aren’t the most friendly to small businesses, so you might have better luck with other options. Services like AdvancedPoint Merchant Capital, for instance, offer business financing and lines of credit to small businesses, but they focus more on cash flow than profits, so that could be a better option for you.

Different lenders will have different standards, so switching providers could be all that you need. This means not having to make major changes to your business finances or your credit.

Improve Your Personal And Business Credit

However, this doesn’t mean that you shouldn’t work on improving your personal and business credit. Even if you seek financing as a business, your personal credit can still have a major effect, especially if you’re just starting out.

The very first thing is making sure that you check your credit report. Errors could make the difference between you getting rejected or approved, so make sure to look carefully, and fix errors immediately.

Next, you want to actually start establishing credit. As a matter of fact, this is the main issue new businesses have to face. And to do so, you have to show activity.

One of the ways that you can start building business credit is to ask vendors and suppliers you work with to report your payment history with business credit agencies such as Dun & Bradstreet. You can even ask your landlord or the person you’re leasing your office space from to report payments.

Another thing you could do is apply for a business secured card. The way this works is that you will have to make a deposit upfront, which will serve as your credit limit. If your account remains in good standing, you might be able to get it upgraded to a regular card. However, if you want to use it to build business credit, you have to make sure that the information will be reported to business bureau agencies, so make sure that you ask about that first.


Getting denied for a business loan is never easy, but that doesn’t mean there isn’t hope. Make sure that you look at all the options there are out there and do everything in your power to start building your credit one step at a time.