Working capital for your small business is critical for growth and sustainability. Alternative lenders provide quick access to funding with high approval rates. Despite having higher approval rates, some borrower attributes weigh prominently in contributing to getting declined by online lenders. Below are six factors that may contribute to your request for funding being denied:

1.  Limited cash flow – Little to no cash flow in the form of low revenue or few deposits is a red flag to business lenders. Having consistent proof of incoming revenue demonstrates your ability to provide value to your customer-base and is the strongest indicator you will have the ability to pay back a loan.
2. Low time in business – Securing funding as a young business is not an easy task. Demonstrating success over a few months does not always prove sustainability and an ability to pay back a loan if circumstances turn south. SnapCap’s average customer has been in business around 5 years, but we can facilitate access to funding to young businesses if they are showing great potential.
3. Industry Restrictions – Even if you have great cash flow, have been in business for many years, and have a fantastic credit score, it is possible that your loan application will be denied due to industry. Industry restrictions vary by lender, and SnapCap works strategically to find the best financing for all businesses. However, we do have a short list of restricted businesses we are unable to facilitate funding to.
4. Existing loan balances – Existing debt has the potential to deter lenders from working with your business unless refinancing your existing or extending your terms will be advantageous to your business. SnapCap can work with you to consolidate debt and remove that stress of paying many lenders if the circumstances are right.
5. Poor credit score – The importance of a loan approval weighs heavily on a fair to good credit score. If your credit score is below 600, it is much harder for your to get approved for business funding until you improve your business credit score.
6. Unclear business plan – A strongly prepared business plan is a great tool in requesting and receiving business funding fast. Without a strong business outline and reason for funding, it makes finding a loan more difficult to secure. Preparing a logical plan for funds is essential to pre-qualifying for a loan.

The landscape for funding small business continues to improve. If you have faced challenges in getting your loan application approved in the past, keep your head up and address the factors that contributed to the decline. SnapCap is determined to assist as many small business owners as possible that meet our basic list of requirements. Our knowledgeable loan officers understand business owners needs for funding and will work to educate business owners if appropriate. If your business is in need of funding or has questions, apply in minutes online to see what amount you are pre-qualified to receive.