Rejection really hurts. It can inflict serious damage to our psychological well-being. But when you are running a small business, there is no time for reflection or sadness. Businesses are run on sheer passion. So when a bank denies you a business loan, it is time to find a suitable alternative. As cliché as it may sound- a ‘plan B’ should be used in your. Here are a few alternatives for business to opt for when a bank denies your loan request.
1. Heard about bootstrapping
The good old self-funding is today, known as bootstrapping. For nascent businesses, it is much difficult to get an external funding. Often, even the business plan is not completely executed when the requirement for a business loan crops up. Instead of taking your months old business to financial lenders, as an entrepreneur, you can use the surplus funds to drive the business at full swing. Once the ball is set rolling, you can get external funding at a later stage.
2. Meet an angel (investor)
Angel Investor are interested in investing in small businesses which show growth potential. They often work in groups and they jointly assess the business before investing. Besides a business loan, they can monitor or advice the business owner for better performance. Some of the biggest firms today were born in one room and had angel investors at their initial stage.
3. Business Loan from NBFC
We have earlier mentioned about banks and their strict lending guidelines. If you are one of those whose loan application has been rejected, don’t worry. NBFCs like Tata Capital can help. If your business loan requirement is between Rs 5 to Rs 50 lakh, getting the funds is not a problem if you and your business meet the business loan eligibility criteria. With flexible and customized business loan repayment options, loans for business from top-quality NBFCs is always a good option. Due to their proprietary credit scoring models and business in dealing with entrepreneurs, NBFCs can actually say yes when the banks say no.
4. Government scheme assistance
There are some schemes that allow small and medium-sized enterprises to take small business loans. One can get a benefit from the ‘Startup India’ scheme for new businesses. Of course, having business loan eligibility is important. In comparison, getting a loan for business from NBFC is relatively easy. All you need is KYC documents of the company & business owners, balance sheet and profit & loss accounts, income tax returns, a report detailing how the business loan will be used etc.
So if you have been turned down by a bank, don’t scale back your plans, get your source of cash through NBFCs like Tata Capital. Get customized loans to suit your business plans and flexible options to repay the loan to keep you ahead in business. Click here to know more about Tata Capital Business Loans.