Reference no: EM132678091

One of the biggest challenges for small business owners is the lack of financing available to start and/or grow a business. Because of COVID-19 and the Economic recession, Banks have been more conservative lately and require more things to get someone approved for a business loan. If you are a business owner looking for capital, the Bank will usually require 3 years worth of taxes showing healthy profits and balance sheet and good personal credit (at least 680 FICO Score) among other things like collateral, cash flow, low leverage etc. However, not a lot of businesses can meet these requirements in today's market because many companies' strategy is to avoid taxes and deduct as many expenses as possible, reducing their profit to a minimum; hence, decreasing their possibilities of obtaining a business loan. So, in some cases this can be counterproductive. In general, Banks just want to see that you are able to pay them back. But Banks are not the only answer, there are many other alternative and nonprofit lenders in the market that can help those that are not able to get a loan with a traditional Bank.

Conduct a little bit of research and look for Alternative Lenders out there. Alternative lenders are usually nonprofit organizations that are able to help business owners that are not able to get a loan with a Bank. You can call or visit the SBA (Small Business Administration) website, search in Google, ask a Banker etc. What did you find out? what is option B out there for the non-bankable and what are some of their requirements? If a company is not able to obtain capital via a loan, what would you suggest?

Note: Ignore all the cash advance, merchant services, factoring, private online loans etc. These are highly expensive and not regulated by the government. Hence, there is a lot of fraud and are not recommended for any business owner. Look for CDFI organizations.