5 Reasons Why You Can’t Get Funding for Your Small Business
- August 29, 2022
- By REIL Capital
There comes a certain point in a small business’ timeline where it may be deemed necessary to request additional funding. Applying for financing is helpful in taking off added weight and keeping operations afloat. However, it’s not always guaranteed that an application will result in approval. Find it difficult to be granted additional funding? Here are the reasons why you can’t get funding for your small business.
Bad Credit Score
Having a low credit score decreases your chances of getting a small business funding approval. A credit score is an important factor that lenders take a good look at to determine how responsible you exactly are when it comes to finances.
If your report reveals a timeline of missing or late payments, then that’s a telltale sign that you have a poor credit history and professional lenders would not want to push through with the transaction. Now’s a good time for you to assess your credit score and be more financially responsible if it needs improvement.
Insufficient Business Plan
If you’re going to apply for funding but you haven’t clearly established your goals and financial projections then it’s going to let professional lenders know that you’re unprepared with which direction your small business is headed.
A lack of a business plan shows instability which makes your case too risky to handle. So, before you apply, you need to have your business plan ready to prove to them why you need funding and how it’ll benefit your small business.
Lack of Cash Flow
Having a consistent cash flow is also key when getting approved for financing. Your cash flow dictates your small business’ financial health and a positive one means that the operations are self-sustaining and have the capability of paying expenses and meeting debts.
Too Much Debt
If your small business has a history of incurring too much debt, then it’s not going to look good at all. It will give the lenders the impression of financial instability and low income, which means that your small business isn’t that profitable.
Clear any of your ongoing debts and ensure that it’s done properly and before the deadline as this opens up more opportunities for financing for your small business.
The Age of Your Small Business
When a business is still relatively new in the market, it can be considered as a risky venture for some lenders. There’s no guarantee yet that your business is going to explode in profit as time passes by, and it’s important that your business has the security of being able to make timely payments. The best thing to do is to wait it out or find the perfect timing to apply for funding.
The REIL Deal
From invoice to equipment financing, we want to make sure you acquire the right type of funding for your business. Our website is equipped with live customer chat support, and when you’re ready, you can apply here and watch your business grow.