So many fantastic businesses ideas die on the vine because they can’t get funded. It’s tragic, but the good news is it’s not permanent. There are things almost any business owner can do to drastically increase the chances of being funded.
If you’re doing none of the things below, your chance of getting funded is minimal. When implemented, however, these tips for getting funded will skyrocket your odds. Stay around a bit to find out how.
Ditch Old School, Try Marketplace Lending
Banks made some mistakes a while back with the housing crisis. It was bad news, and the result was a lot of new regulations put upon traditional lenders. Because of this, it’s really hard to get a bank loan these days. In fact, it takes around 29 hours just to apply for a bank loan. Additionally, around 80% of applicants are rejected.
That’s a lot of time and not a lot of payoff. Hence, lending marketplaces like Lendio were invented.
With a marketplace lender, applications can take as little as 15 minutes—which is 116x faster than a traditional bank application. And, the average approval rating is around 60%. Not only does marketplace lending take less time, it’s more likely to work.
Another thing: applications don’t take weeks to get approved, they take days. Traditional lenders usually make you wait 2 or 3 weeks before they even let you know you’ve been cleared for launch. After that, they make you wait even longer to get the funding fuel you need to takeoff.
Lendio will get you your money quick – often within 24 hours of being approved.
Get Your Credit On Track
Business credit is crucial for small businesses who need to fund their dreams. It’s something almost every lender looks at. And businesses who know and understand their credit score are 41% more likely to be approved when they apply for a loan, according to the Nav American Dream Gap Survey.
There are three main players you can go to for your score:
Each of these providers has a slightly different way of looking at your credit, but taking the time to review your scores on their websites will help you know you’re playing with a full deck or if you have some room to improve.
Check out this additional information to learn more about building strong business credit.
Live In One of the Top 10 States for Business Lending
Lendio recently released it’s top 10 Best States for Small Business Lending. They are:
- New York
- New Jersey
Interestingly, Utah and California both clinched the top spot, tying for first. The states on this list represent places where the lending environment is vibrant and active. In each of the top states, demand for loans increased year-over-year. Additionally, the states with the biggest percent increase in demand for loans year-over-year were Texas (119%), Illinois (101%), Florida (95%) and Utah (81%).
Now, obviously I’m not asking you to pack up shop if you don’t live in one of the aforementioned states. But, if you need a little bit of an edge, setting up shop in one of these places can’t hurt.
Be In the Right Industry
Not all industries are created equal in the eyes of lenders. Finance, insurance, real estate, health, agriculture, and wholesale industries are more likely to be funded. Why? Because they’re generally more likely to succeed, according to the Statistic Brain Research Center.
If you’re already locked and loaded into another industry, there’s no need to throw in the towel. As long as you have a viable business model, chances are you’ll be able to access the capital you need. In fact, Lendio’s marketplace features small business loans for just about every industry there is…
Try This Other Stuff
Here’s a few additional factors that some of the lending experts at Lendio recommend looking into:
- Having separate business and personal accounts
- Keeping financial records current
- Having a detailed plan for how the loan will be used
- Being in business at least two years
Bottom line: if you can figure out how to improve upon and implement the aforementioned tips, you can expect some serious cash to come your way.