There’s something inherently romantic about the notion of ditching the 9-5 rat race, taking the plunge and going into business for yourself. For those who’ve languished unrewarded for their passion imagination, ingenuity and dedication for years, the digital era has made it easier than ever for savvy entrepreneurs to find their niche in a market of their choosing and find the right target audience for their products and services.
Unfortunately, as the old saying goes, it takes money to make money. Even a modest business requires seed money to cover the startup costs and ongoing overheads. Whether you need to secure the cash to start up a business of your very own or make the kind of capital investment that will help it grow, it can be extremely frustrating when your application for funding is turned down by the banks.
Worry not, however, even if every bank in town refuses you a business loan, your dreams are not dashed to pieces. There are more options than ever to secure business finance. Getting the bank door slammed into your face can surely be an obstacle, but it’s not one that should be allowed to dampen your ambitions…
A rejection from the bank does NOT mean your business plan is bad!
Banks have to be risk averse, especially since decades of recklessness caused the 2007-2008 financial crisis which is still fresh in our minds. There are many factors that may influence their decision that don’t necessarily speak to the effectiveness of your business plan.
Put in as much of your own capital as you can
There are a range of alternative lenders out there, however, if you have some of your own capital to invest in your own business, this can be very encouraging to a range of lenders. Whether you scour the market for a higher yield savings account or check out CMC Markets for some information on how to trade effectively in the stock market, raising some of your own cash can be advantageous. Even a relatively small fraction of your overall startup costs can show a lender that you’re to be taken seriously.
Ask your bank if they have a referral scheme
In some territories such as the UK, government legislature means that a bank that rejects your application for business funding is legally obliged to help you to find alternative funding under the Small Business Enterprise and Employment Act of 2015. This legislation is designed to stimulate economic growth by giving small businesses a helping hand and to incentivize entrepreneurship.
Alternative starting up funding options
Startup funding can be an extremely tough nut to crack when you don’t have a proven track record as an entrepreneur. Fortunately, there are a great many business loans on the market from alternative lenders at interest rates that are designed to be reasonable for businesses that are just starting out. Even outside of the realm of commercial loans, there are still a great many options open to you, such as;
- Regional or community funding
- Government grants
- Business angel funding
- Invoice factoring
Don’t let a negative response from the banks deter you from living your dreams!