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Financing Options After a Failed Pre-Approval

Financing Options After a Failed Pre-Approval | BITX Blog

If you’re like many small business owners, chances have failed a pre-approval or have been denied financing.  Perhaps your FICO score is too low, you haven’t been in business for 3 or more years, or you may have a blemish on your business credit.  Banks will still say no if you have a healthy business with positive cash flow if you don’t meet their long list of stipulations.  A recent report found that nearly 60% of small businesses in need of capital went to a bank first, but only 27% were approved for a loan.   However, there are still several viable options to consider when the banks say no.

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What To Do Next?

Before you explore other options, understand why you were declined by the bank.  There may be some factors in your control, and with some adjustments, the creditworthiness of your business can improve.

Small business owners like you use the alternative lending options below to secure the funding their businesses require.  Factors like the application process, funding speed, and loan terms will all play a part in choosing one of these popular options.

Financing Options for Small Business Owners

Small Business Association Loans

While the SBA doesn’t lend directly to small businesses, they do take some risks off the table, which enables the bank to lend when traditional Business loans aren’t an option.  If you’re eligible to apply, you will need to meet specific criteria and provide documents, including a sound business plan and financial statements, to name a few.  The process can take anywhere from several weeks to several months to complete.

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Business Line of Credit

An unsecured line of credit provides fast access to funds, flexibility in repayment, and separation from personal credit.  One downside is the risk of building up debt, as payback terms aren’t preset.  You have two options in this category; traditional lines from a bank or non-traditional lines from alternative sources.  Like business loans, banks will have numerous stipulations to obtain a line of credit. Non-traditional alternatives require far less scrutiny than banks and can deliver decisions much faster. These non-traditional alternatives also provide small business loans for women. So, all women looking for an opportunity can get help from these organizations.


Depending on your business model and strategy, you may consider crowdfunding.  This new model enables many individuals to make small contributions toward funding your project via a web platform. The business offers a product or service to each individual in return.  If this option sounds attractive, be prepared to invest your time in developing and marketing your project, as it will be essential to attract as many individuals as possible.

Alternative Financing Options

The fastest growing option for small business owners to access capital is alternative non-bank lending.  Driven by simplicity, convenience, and speed, alternative lenders like BitX Funding, offer loan decisions within hours and deliver funding in days.

This is a great alternative to business financing.  Approvals are based on unique data points and cash flow evaluation, but the cost of capital is higher than that of a traditional bank loan.  Transparent terms, fixed automatic repayments, and convenience improve customer experience.

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Merchant Cash Advance

Another non-bank option for funding is a Merchant Cash Advance.  MCAs are not loans, so if the business has a limited history or poor credit, that may be ok.  Funding is based on credit/debit card sales, and once approved, fixed automatic repayments are made based on a preset daily percentage.  The cost is typically higher than alternative loans and certainly higher than banks. However, business owners can get funding in days with a simple application and transparent terms.

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Published by Chris Davies, Creative Copywriter at The Labate Group in Westport, CT.


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