When It Comes To Business Loans - Try, Try Again

Online, January 25, 2011 (Newswire.com) - You are trying to start your own business but you need startup capital. So you apply for a business loan. The words you don't want to hear are, "Sorry. We just can't approve your loan."

It's frustrating when your business loan request is denied, and it may feel like your business ideas are now a hopeless venture. But rather than letting those feelings of despair overcome, step back and examine things.

Don't take it personally that your loan was not approved. While it's true that some lenders approve or decline a loan based on the business owner's character there are other factors involved, such as credit scores, income, debt ratio and the risk of the business. When a loan isn't approved, it's usually because of a problem with one of those four reasons.

If your loan request isn't approved, thank the lender anyway. Don't leave on bad terms. You never know what the future holds, and you could cross paths again, particularly if your loan application was borderline. Just because the lender said no today doesn't mean he will tomorrow.

Ask the lender to review with you the details behind his decision. This information could prove valuable when applying for your next loan. And become resourceful. There's more than one way to get the money you need for your business.

You should also step back and take a look at your credit report. Take steps to resolve any issues you find on the report before you try to apply for another loan.

You may wish to consider another type of loan if your business loan application is not approved. If the loan amount is less than $10,000, you could apply for a signature loan. If it's more, you might consider refinancing your home in order to get the startup money you need.

The key to overcoming this first obstacle on your way to owning your own business is to become creative. If you truly have a viable business idea, you should be able to find funding, as long as you've done your homework, and you've developed an effective and detailed business plan and loan proposal.