There are some key steps you should take if your business needs an influx of cash and you can't get a business loan, business finance or SME finance.
Drumming up enough capital to get your business up and running is no easy feat, and millions of entrepreneurs have attempted to secure a loan only to find out that willing creditors are few and far between. Nevertheless, your startup or existing business may find it utterly necessary to get a sudden infusion of capital, and the failure to attain financial flexibility is tantamount to defeat in a competitive marketplace.
Luckily, not getting a business loan doesn't have to spell an end to your business. Here's what to do if you can't get a business loan, and why being turned away isn't always the end of the world.
1. Understand why you were turned down.
Before delving into alternative means of raising cash for your business, it's worthwhile to explore exactly why you were turned down for a business loan in the first place. While many entrepreneurs may throw their hands into the air and give up after being denied a loan, others realize the problem that prevented you from gaining access to a line of credit initially may be solvable later on down the line. If you never know why your business was rejected, you can't hope to strengthen your weak points and return later, more confident and assured of your success than ever before.
It's thus worthwhile to peruse some common reasons that businesses are turned away from loans, as this will help you successfully petition for financial assistance in the future. When you've truly exhausted your supply of creditors, however, and a business loan simply isn't forthcoming, you need to get down to brass tacks and pursue alternative measures of establishing or broadening your commercial empire. One excellent, and uniquely modern, method is to rely upon is crowdsourcing. This option is easier and more profitable today than it was just a few years ago.
Crowdsourcing, as the name implies, depends upon sourcing your funds from a large crowd of people. In most cases, it means taking your case directly to the public and reaching out to thousands, or even millions, of people at once by harnessing the power of digital technology. Social media campaigns and digital marketing efforts have already demonstrated that crowdsourcing can be incredibly effective. The benefits of crowdsourcing are incredibly diverse, such as when NASA relied upon it for idea generation. However, business owners will be interested in the ability of crowdsourcing to drum up huge sums of cash from the popular approval of everyday people who want to see your dreams turned into a reality.
Crowdsourcing your business's capital needs will only work if you can persuasively convince a mass audience to get behind your plans. This is why crowdsourcing is particularly popular amongst startups that have taken to labeling it "peer-to-peer investment," though even well-established business owners can rely upon the method if they know what they’re doing.
