Roughly 77% can’t get Arizona Business Loans and lines of credit at all or in meaningful amounts. If one or more of them is holding you back too, you still have financing options.
The Small Business Credit Survey is an annual publication produced by the 12 Federal Reserve Banks. The latest version indicates that of those who apply, 23% don’t get any kind of financing and 54% don’t get the amount of cash they need. These shortfalls can effectively shut down a company or stunt its growth. Oftentimes, banks cite one or more of five main reasons for denials.
1) Insufficient Credit History: The greatest cause for financing shortfalls for small businesses is not having established credit. This impacts 36% of those who apply.
2) Insufficient Collateral: When credit isn’t enough to obtain financing, sometimes people can use assets as collateral. However, 35% of shortfalls in financing are impacted by lack of assets.
3) Too Much Debt: The survey found that 30% of businesses don’t get the funding they need because the bank thinks they have too much debt to be able to make good on additional payments toward Arizona Business Loans.
4) Low Credit Score: In all 27% don’t have a good enough credit score to qualify for the loan they need. The numbers skyrocket if the lender considers you to be medium risk or high risk, with just 29% and 10% being fully funded, respectively. To clarify, you would have to have a minimum business credit score of 80-100 or a personal credit score greater than 720 to NOT fit into one of those categories.
5) Weak Business Performance: The last measurable segment includes those who are operating underperforming businesses, which could very well be weak because they lack capital. Even still, this ranks among the reasons for not being offered cash 22% of the time.
Given that lack of collateral only impacts 35% of small Arizona Business Loans, the approval rate could theoretically be as high as 65%, yet just 23% are getting all the funding they need. This means it’s not lack of collateral holding business owners back, but issues like credit, debt, and business performance. Yet, everybody knows it takes money to make money. The simple answer to getting around most denials: hard money.
Arizona Hard Money Lenders are different because they care more about the value of the collateral than they do about all the other common factors that result in denials. In other words, it’s easier to get Arizona Business Loans this way and a greater number of people will qualify for them—including those who have already been denied by banks. The terms are a little different too. Instead of taking out funds for an extended period of time and paying on the interest and principal each month, you’ll likely have the funds for a year or two, making interest-only payments for the duration and paying off the principal in the end. If you think a hard money loan is right for you, talk to a broker to find out what kind of terms you qualify for.
Level 4 Funding LLC
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
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