Alternative Financing Solutions for Individuals Denied by Traditional Banks

If you’re looking to start or expand your business but traditional bank loans aren’t an option, there are several alternative funding avenues available that could be the perfect solution for your needs. With a range of options tailored to different types of businesses and requirements, it’s worth exploring these alternatives to see what might work best for you.

First, let’s dive into the realm of Small Business Administration (SBA) loans. The SBA, a government agency dedicated to supporting small businesses and entrepreneurs, stands as a significant source, securing loans with more favorable terms than conventional loans. Applying for an SBA loan through a lending institution initiates a process wherein the SBA provides a loan guarantee, ensuring that, in case of default, the government covers the guaranteed amount.

Here are 10 alternative choices to consider if you discover that you do not meet the eligibility criteria for a business bank loan.

  1. If a bank rejects your SBA loan application, don’t lose hope; there are Non-bankable SBA lenders approved by the SBA, offering greater flexibility and increased approval chances, especially if you possess industry experience, collateral, or a solid business background.
  2. Non-traditional lenders provide an alternative avenue, lending based on your income not solely on credit. This provides faster approvals and flexible loan terms. However, be mindful of the trade-offs, such as higher interest rates and fees compared to conventional bank loans.
  3. For startups or existing businesses struggling to secure funding, a Business Loan Marketplace can connect you with lenders tailored to your unique circumstances, with no stringent credit or revenue requirements. Again, carefully evaluate the costs and terms before proceeding.
  4. For start-ups with no revenue, newer business with less than 2 years in business, or existing businesses blessed with a good credit profile, exploring lines of credit can be a game-changer, offering rates as attractive as 0% for an initial 18 months, with no constraints on funds utilization.
  5. Term Loans-for start-ups or existing businesses, even those who have W2 income of at least $50K and 680+FICO, can fund your business while maintaining your regular job.
  6. If cash flow issues plague your business due to slow-paying customers, invoice financing (Factoring) can offer solutions. This option lets you sell unpaid invoices to a third-party “factor” for immediate cash, at a potentially higher cost than traditional loans. And this option is based on your customers’ creditworthiness not yours.
  1. Fix-N-Flip real estate investors normally use hard money lenders to provide short-term loans with higher interest rates. They typically aim to complete projects quickly and sell the property for a profit. Avoid waiting for draws, learn how to get cash back at closing.
  1. Commercial real estate for larger investment projects. Investors may secure commercial loans designed for income-generating properties such as apartment complexes, office buildings, or retail spaces. Various programs are available.
  2. Crowdfunding, Angel Investors, and Venture Capitalists presents additional possibilities whereby equity or rewards can be exchanged for capital investment.
  3. Don’t limit your search to Government Grants; corporations, foundations, and non-profit organizations also provide grant opportunities.

Facing rejection from a bank does not mark the end of your entrepreneurial journey. Alternative funding options pave diverse paths to secure the capital necessary for your business’s success. By tapping into alternative funding sources, you can overcome financial obstacles and confidently pursue your business goals.

Whether you opt a traditional or an alternative funding source, conducting thorough research and understanding your options empowers you to make informed decisions.

For assistance with any of the funding options mentioned in this post contact:  Maria Parker, Business Loan Consultant  GreenBank Funding.  Maria can be reached 150 Riverside Pkwy. Suite:115, Fredericksburg VA, 22406, or by phone at (O) 540-900-2588 and (C) 301-801-6662.

The University of Mary Washington Small Business Development Center can assist you in preparing your loan package.  We can help you forecast cash flows, write your business plan, and complete your personal financial statement. If you are already our client, contact your consultant to schedule an appointment.  If you are not a client, request free, confidential assistance by completing this short form: