The Three Biggest Obstacles to Getting a Traditional Bank Loan, and How to Overcome It.
Small businesses need to master the money problem in order to be able to stand on their own two feet. Obtaining funds is not always an easy task, especially when faced with the various obstacles that are characteristic of traditional bank loans. Here are the three biggest hurdles you have to cross when applying for a bank loan:
When you’re a small business, it’s often hard enough to stay afloat, so it’s understandable that you may not have the necessary assets to use as collateral for a small business loan. Many business owners, at a loss for assets will put up their own personal guarantees to secure a bank loan, which means the bank may seize these assets should the business fail to pay all or part of a loan.
Defaults occur when small business owners are unable to repay their loan according to the terms agreed upon with their bank. Defaults can be triggered by a number of things, but can happen from things as simple as missed or late payments. For obvious reasons, this will affect your credit history and will make it far more difficult for you to obtain a loan in the future.
For those who have just launched their businesses, it can be especially difficult to obtain a bank loan due to the simple fact that you won’t have a trading history for the bank to scrutinise. In this way, traditional bank loans can be very rigid and limiting, and there’s no real solution for small business owners, except to keep trading before they can build a financial history.
Despite these obstacles, there are alternatives to small business loans that are more viable and flexible than traditional bank loans. See how Smart@Vance has helped out these business owners, and find out how you can get a loan for your business today.