Being refused funding to start a new business can be a real blow to your plans. After all, to get to the point of applying for loans to get up and running, you will have put a lot of effort into your pitch and made sure you have a viable business plan.
There is no denying that applying for company capital, especially as a startup, can be difficult. Obtaining vital business credit might be challenging without a track record of timely repayments on monies borrowed. However, this does not mean the end of your business as there are other choices available.
But before you go down this route, there could be several reasons why your company has been denied business credit.
It can be worth your while going back over your personal history and your business plan to see if there was anything you missed. It can be you miscalculated your figures, defaults in your credit score or a culmination of different factors that need addressing before you are ready to trade.
Next, looking at other options for finance can be a way forward to help you get up and running.
Frontier markets are classed as the third rung down in the investing ladder. Although the designation assesses a country’s wealth and growth stage, it is mainly concerned with its markets. Depending on who is doing the categorization, there are approximately 30 frontier markets, with most of them located in the Middle East, Asia, Africa, and Eastern Europe. If you meet the criteria, choose a reputable frontier markets investing firm in collaborating with and getting the funding you require.
Crowdfunding has gained popularity in recent years, thanks to websites such as Kickstarter and Crowdfunder, among others. Many people invest small sums of money to raise money for a company through this kind of financing. You must typically present a distinctive pitch and demonstrate substantial study into your specific industry, as well as ideas for long-term expansion, to be considered successful.
If your business loan application is denied, invoice finance may be an option. Lending is based on your invoice totals. Some financing companies may require proof of minimum turnover for established companies, while others will deal with startups. Whether or not you will be accepted will be based on your client list and whether or not they are likely to pay on time.
Peer to Peer Lending
Peer-to-peer finance, which is similar to crowdsourcing, gives you the ability to link your company with individual and corporate investors through the internet. This is typically interest-based lending, and the rates of return can be significantly higher than those offered by other lending sources.
If you can reasonably expect to be able to pay back what you borrow from credit cards, or you can get started on a smaller sum, taking out a credit card to help you get started could be a viable option. Choose a card that offers rewards or has a lower interest rate/interest-free offer to buy what you need and then pay it back either all at once or over a short period to avoid paying too much interest.