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Applying for small business loans is never a sure bet. There are so many things that can screw up your chances for approval. Often small business owners are blindsided by these things. But, in fact, most potential problems are predictable – if you do your homework. At United Capital Source, our goal is to help small businesses grow. In this article, I’ll explain 7 things that could screw up your small business loan, and how to avoid them.


I’ll bet you didn’t expect me to say that your bank is a problem. But the truth is, banks approve only a small percentage of small business loans. You don’t fit their risk or lending profiles. You can try, but don’t expect good news.

Writing for the US Small Business Administration, business finance expert Marco Carbajo says, “There are many other types of funding programs that offer small business owners the opportunity to get business loans or access to cash without having perfect credit or subjecting themselves to all the rigorous analysis, cumbersome paperwork, lengthy process and aggravating timelines that comes with a traditional business loan.”


Sheesh! You knew there would be a pile of paperwork to apply for a bank loan. But who knew you’d have to wait 60 days or longer to get an answer? What’s the point? You needed the money back then, not someday far into the future. This scenario just doesn’t work for small businesses. You can’t afford to wait around for money to fix problems. Nor can you afford to lose opportunities.


This is a common problem for small businesses. Bad credit happens for all sorts of reasons. Sometimes due to issues you can’t control. And it’s a deal-killer, if you try to borrow from a bank. Even with SBA backing. But why is your bad credit a surprise? I find a lot of small business owners don’t even realize their business has a credit score. Or what factors determine that number. Your financial future depends on building the best credit history possible. And that starts by knowing where you stand.

The good news is that bad credit doesn’t mean you cannot get small business loans. You’ll simply have to look beyond your bank for alternative business lenders that provide business loans for bad credit.


Like choosing the wrong lender, this mistake can entirely derail your loan application. And whatever you planned to do with the money. The more you know about working capital loans, the better prepared you will be.

Alternative small business loans allow you to avoid screw-ups. And the headaches and disappointment that go with them. They are different than bank loans in many ways. The most important is that approval depends on practical factors that indicate your business can repay.

For example, if you make regular bank deposits, that shows steady income. You can borrow against that. Or if you do a lot of credit card business, you can borrow against future transactions. Do you have outstanding customer or patient invoices? You can sell them to a third party – get your money now, and let them collect the debts.

Here’s what you can expect:

  • The application process takes minutes.
  • You can be approved within 24 hours. And, by the way, approval rates for alternative small business loans are far higher than bank loans.
  • Even better, you can get your money in less than a week. Maybe as little as 72 hours.
  • You don’t have to put up collateral. Or personally guarantee the loan.
  • Repayment terms are flexible. Your business is not exactly like any other. So cookie-cutter, one-size-fits-all “solutions” don’t fit.
  • Bad credit is not usually a problem.

Now we’re talking. Small business loans that actually work for small businesses. And keep your business – and your employees – working steadily.


No one loans money just for fun. And your business should never borrow without a clear purpose. There are many good reasonsto apply for small business loans. But you can’t expect lenders to read your mind. You have to clarify – for yourself or for potential lenders – just why you need the money. You won’t need a detailed business plan to apply for alternative financing. But defining your purpose determines how much money you should borrow. And how much time you’ll need to repay.

Why is this so important? Small business owners can be tempted to borrow too much money. Or too little. If you’re planning a lengthy project, consider applying for smaller, incremental loans. You can pay off one before taking on the next.


Inadequate or irregular cash flow makes lenders wonder if you can repay. And for good reason. Inability to manage cash flow is one of the most common reasons businesses fail. Yet here’s something unexpected: the right small business loans can improveyour cash flow.


This is a self-fulfilling prophecy. You’ll never get the financial help you need, because you’ll never even try. Small business owners have to be proactive. Barry Glassman is a financial advisor. He encourages small business owners to access capital as a way to improve their businesses. And gain a competitive edge. Why?

  • Smooth cash flow to stabilize ongoing operations
  • Expand your business — open a second location, introduce new products or services, hire more people
  • Refinance old debt at a lower interest rate
  • Establish a business line of credit as a backup resource to pay regular business obligations or handle unforeseen emergencies

If you do your homework, you’ll know what to expect when you apply for small business loans. You’ll know which type of financing to use for each type of need. And how to use small business loans to build a stronger credit score. You’ll be money ahead, as they say. And you’ll be a smarter, more effective business manager. Just remember you don’t have to do it all alone. Our friendly, expert team at United Capital Source is here to help. So give us a call. We’re standing by.

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