Banks Have a Lot of Reasons to Reject Your Small Business Loan

For a small business to grow into a big business, it needs a loan unless it has exceptional sales and profit margins. A small business owner has quite a few places where he/she can go with a loan request. Banks seem to be one of their options on most occasions. What these owners might not realize is that banks have recently developed a reputation for rejecting small business loans. It seems that banks are more interested in financing large businesses due to their benefits. A bank can come up with a variety of reasons to reject loan approval for a small business. Some of the common reasons are as under:

Reasons for Banks to Reject Your Small Business Loan

Credit History

One of the barriers between you and the business loan is credit history. When you go to a bank, they look at your personal as well as business credit reports. Some people are under the impression that their personal credit does not affect their business loans. But that’s not always the case. A majority of banks look into both the types of credits. One of the aspects of credit that matter a lot to the banks is credit history. The length of your credit history can affect your loan approval negatively or positively.

The more information banks have at hand to assess your business’ creditworthiness, the easier it is for them to forward you the loan. However, if your business is new and your credit history is short, banks will be unwilling to forward you the desired loan.

Risky Business

You must be aware of the term high-risk business. In fact, lending institutions have created an entire industry for high-risk businesses to help them with loans, credit card payments, etc. A bank can look at a lot of factors to evaluate your business as a high-risk business. Perhaps you belong to an industry that is high-risk per se. Examples of such businesses are companies selling marijuana-based products, online gambling platforms, and casinos, dating services, blockchain-based services, etc. It is imperative to understand that your business’ activities can also make it a high-risk business.

For example, your business might not be a high-risk business per se, but perhaps you have received too many charge-backs on your shipped orders from your customers. In that case, the bank will see you as a risky investment and might eventually reject your loan application.

Cash Flow

As stated earlier, your credit history matters a lot when a bank is to approve your loan request. While having a short credit history increases your chances of rejection, a long credit history isn’t always a savior too. Any financial incidents on your credit history that do not favor your business can force the bank to reject your application. One of the most important considerations is the cash flow of your business. When you have cash flow issues, you are at risk of receiving a “no” from the bank for your loan.

Your cash flow is a measure for the bank to know how easily you return the loan. If you are tight on cash flow, how will you manage the repayments? However, cash flow is one of the controllable factors for you. Find ways to increase your revenues and lower your expenses. Once you have the right balance, you can approach the bank for a loan.

The Debt

A mistake that small business owners often make is trying out too many places for loans. They will avoid going to the bank first but get loans from several other sources in the meantime. Once you have obtained your business funding from other sources, it makes sense to return it in time. Approaching the bank when you already have a lot of debt to pay is not advisable at all. Do keep in mind that the debt you or your business owes affects your credit score as well. In short, the bank does not even have to investigate to know your debt. An overview of your credit report can tell the story.

The Preparation

Sometimes, your business is doing fine, and your credit score is in good shape as well. However, what’s missing is a solid business plan and proper preparation for loan approval. If you haven’t already figured out, banks require you to present a lot of documents with your loan approval request. Here are only some of the documents you will have to present to the bank to get approval for your loan.

  • Income tax returns
  • Existing loan documents
  • Personal financial documents
  • Affiliations and ownership
  • Business lease documents
  • Financial statements of the business

You have to be exceptionally careful when these documents and presenting them to the bank. Any discrepancies can result in loan rejection.

Concentration of Customers

This one might come as a surprise to some, but a lot of banks consider this aspect of your business seriously. You must not forget that loans are banks’ investments. Businesses that approach the banks are their vehicles to multiply their money in the form of interest. If the bank senses that your business does not have the potential to expand, it can reject your loan request. Think of a mom and pop shop in a small town with a small population. If it only serves the people of that town and has no potential to grow further, a rejection is imminent.

In this particular case, even if the business has considerable profit margins, it relies on its regular customers for that. The bank might see it as a returnable loan but not as an investment opportunity.

Conclusion

The good news is that you have a lot of funding options as a small business owner. Today, banks are only one of the many options for you to fund your bank. You don’t necessarily have to apply for loans when you have crowdfunding platforms actively helping small business with their funding needs. If you are seeking a business loan from a bank, that’s fine. However, if the bank does not approve your request, it should not worry you much.

Online Education – Education In Vogue

Time management is the key to success in today’s fast paced world. How one manages his or her time determines the success quotient and this is the reason why online education id gaining immense popularity. Since online education offers unmatched flexibility and the students and learners can manage time in line with their other priorities, it is becoming a very popular mode of education in almost all parts of the world. The growing popularity of online education has resulted in the establishment of several online educational institutions offering online degree courses and other learning opportunities.

Some people harbored the misconception that the advantages of online education are restricted only for those students and learners who had an established record of past accomplishments. This also led to the belief that online education helps only those who have access to modern means of communication as computer and Internet. However, as the awareness about various modes of online education is increasing the misconceptions related to online education are giving way to more acceptability to online education and training.

Changing perception

It is a talk of the past when people considered online mode of education as a quick way of obtaining a degree or getting good grades. In the past, the reputed educational institutions were not offering online education. However, with the increasing popularity of online education, the majority of institutions offering online courses are well-established institutes and they have a rich experience to provide such education. It is worth mentioning, that a large number of world’s leading educational institutions are offering online education courses on a wide range of subjects.

Growth drivers

Today, most of the accredited online education courses have talented teachers and professors of repute in their respective specialization. This ensures qualitative learning. The students signing up with online education courses, can be assured of guaranteed results. Moreover, online education is more interesting and more competitive when compared to the traditional teaching methodologies.

Employers’ viewpoint

Undoubtedly, many employers were and some of them are still having doubts about the value of online education. However, with change in perception and emerging popularity, a large number of employers have realized their worth. Now the employers consider the online degrees from accredited and well-established online educational institutes of repute. Moreover, the increasing number of people who enroll for online education has changed the employers’ perception and now they readily consider the benefits of online education.

Some research reports point out that technology oriented industries such as, communication, computers, media and marketing have started to accept the candidates having online degree courses from accredited and reputed institutions.

Special Finance Auto Leads – To Lease Or Purchase, That is the Question

Buying a new car can be an exciting, exhilarating time. However, the question of payment invariably arises. While most consumers lack the money to pay for a car upfront, two other forms of payment are both quite popular. Leasing and financing are the two of the most common ways to get a new vehicle. However, how do you know which method is right for you? What does each offer? Both methods offer benefits and drawbacks; here’s a quick break down.

Auto Leasing: On the surface, leasing a new car is the least expensive way to purchase a car. In addition, you often find that the monthly lease payments are lower than if you financed your car. You are able to trade your car in easily at the end of the lease and get to drive newer vehicles on a regular basis. This is a great option for those who want a new set of wheels every couple of years.

However, leasing a car is much like renting an apartment. You shell out cash each month for something that you will never own. Because you will never own the vehicle, leasing is actually more expensive than purchasing a vehicle. When you finance a car, your payments end, at some point. It is not so with car leasing.

In addition, leasing has a few other drawbacks. Severely limited annual mileage is one of them. If you go over the mileage stipulated in the lease agreement, you will have to pay for it. You will also have to pay for any wear and tear on the vehicle at lease termination. This can quickly add up to a wallet-draining experience.

Auto Financing: Financing your car seems to be more expensive than leasing. However, it does have considerable advantages. First, you will actually own your car when the last payment is made. Second, you can drive your car as much as you wish – it’s yours! Finally, financed payments can be almost as low as some lease payments, depending on your credit score, you down payment and the company with whom you finance your car.

Auto financing does have a few drawbacks, as well. First, your warranty will eventually expire. While leases are usually always covered by the manufacturer warranty, financing a vehicle is different. Your warranty will expire at some point (usually at the point that you need it most). Once this occurs, any repairs will be out of pocket.

Second, financing can be more expensive in the beginning. While you can often reduce the amount of your monthly payments with smart shopping and bargaining, those payments will likely still be more expensive than a lease payment. However, the savings offset that initial expense when you pay off the car.

Both leasing and financing offer viable options for those who find themselves in need of a new car. Your budget, driving needs and personal wants will dictate which method you choose in the end. Regardless of the method you choose, shop around for the best deal and you’ll be much happier with the result.

Earn Profits Without Risks in Currency Trading

Currency trading can be considered the easiest way to earn profit without risk. If you want an easy way to make huge profits with little knowledge of the market, your best bet is investing in the currency trade.Currency trading is one of the most profitable ways to earn profit directly from your home. Most people refer to it as the foreign exchange, and if you spend a little time becoming familiar with this trade, you will find that the profits will start flowing faster than you expected.Why is it so profitable and easy to trade currency? Simply because the stock market is susceptible and unpredictable. It follows companies’ trends. Do you realize how many stocks there are to choose from? The choice of stocks alone will give you a good headache to start off with, let alone the investigation work you need to carry out to see if a company is solid and reliable. You have to keep up with all their financial balances, fluctuations, and all it takes is one negative opinion on that company to make the stock plummet.With currency trading you can forget all that extra work; you will only be dealing with about ten major currencies. You will simply be choosing from among the strongest on the currency exchange market, and you can buy and sell at your whim.The good news with the currency trade is that you do not need much money to start off with, and you can still earn profit without risk and get huge returns for your currency trading investments. You can learn how to trade currency just as a professional would and in no time, with a series of winning techniques.You will only need to spare a little of your time each day and a small sum to invest in trading currency, to get high profits. The secret to earning profit without risks in this trade lies in how you deal with the psychological aspect when you trade currency.There is nothing more profitable and risk free than currency trade, your earnings will double or more, while your investment stays at a minimum: there is nothing as risk free as trading currency.The main currencies you will be trading in are the Swiss Franc, the British Pound, Euros, Canadian Dollar, Japanese Yen, Mexican Peso and the German Mark. Now, it is not that difficult to follow this short list! Currency trading is a real business and can be quite an amusing pastime, without the stress or fear of losing huge amounts of money, because you do not need large amounts to profit from it.You do not need automated EA programs to earn from currency trading; you can learn the secret to risk free successful currency trading with a few simple tips and turn small sums of money into huge profits.You can find the best trading opportunities in currency, effortlessly and without risk. This will allow you to lead a life free of financial worries by choosing currency trading as your strategy for earning profits without investing your life-long savings.

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