Where to get money for business development, if you are denied by banks

If you run your business and want to develop, you need money. The most common way is to get money from the bank, because they earn on loans and are interested in giving them to you. However, in practice, everything turns out to be far from as simple as promises a lot of advertising. Very often banks either refuse to issue loans for business development, or offer sky-high interest rates. Why is this happening?

Each application undergoes a multifactor check, which, in addition to automatic credit analysis, your level of life, age, education, etc., can include checking the reliability of data by bank employees. If there is at least one non-compliance with the requirements (for example, one or two old late payments) in the database that the bank uses, then you can not only refuse, but also put in the so-called "stop list", from which it is very difficult to get out . What are the reasons for the refusal, you most likely will not know, but, as a rule, they can be as follows:

• Lack of registration documents;

• Lack of collateral;

• Non-transparency of business;

• A loan with a bad credit history;

• Doubts about your social security;

• Incomplete or inaccurate information;

• Business affiliation to the high-risk industry;

• Zero declaration (USN, for income tax, UTII, etc.).

In some cases, banks agree to give you a loan, even if there is any inconsistency with the requirements, but at the same time an inflated interest rate is set. This situation may be due to the fact that it is much easier for a bank to be reinsured once again than to delve into the details of your biography and business.

Alternative options

If the bank refused to issue a loan, you can try to apply to several more banks, contact the credit broker, non-bank lending institutions or try to get a loan from a private person or organization. All these options have both pluses and minuses:

• Apply in several more banks. If you are sure that with your documents, credit history, etc. It's all right - it makes sense. Otherwise, the more banks you turn to and the more you receive refusals, the more you reduce your chances of getting a loan for business development in principle. Each your appeal / refusal is fixed in banking systems, and all subsequent banks are easier to refuse simply "by analogy" than to understand the details.

• Use the services of a credit broker. Unfortunately, no broker can guarantee in advance that you will get a loan. It is more reasonable to resort to their services if your credit history is in order, and you simply do not have time to understand all the intricacies of the huge number of loan offers. If you are offered to make "corrections" to your documentation, it is better to refuse such services, since it is illegal, and in some cases - criminally punishable. In any case, remember:

  • Brokers often pick you not the best bank, but one with which they have certain oral "arrangements", based on their personal material interest;

  • The broker needs to pay (up to 5%) even if you refuse to take the loan approved by the bank, because Its conditions do not suit you.

• Get a loan from a non-bank credit institution. To such organizations it is possible to carry various pawnshops (including issuing a loan against a car mortgage), as well as firms engaged in microcrediting. As a rule, they make very few demands on borrowers, money is given out easily and quickly enough. The most significant drawback of this method of obtaining money is very high interest rates - up to 1000% per annum, and this is the direct way to the debt hole. In addition, there is a very high risk of running into scammers, especially if you are offered a loan against an apartment - often you risk losing your property altogether due to the unlawful actions of such "creditors".

• Get a loan from private individuals . At first glance, this is the most time-consuming way to get money for business development, as it is often unclear where to look for such investors. However, to date, there are quite a lot of online loan sites, where you can independently find investors by placing your project.

Online loan sites
Such Internet sites have a number of undoubted advantages:
Profitable rates from 15% . Unlike banks, the contract is concluded directly between the borrower and the investor without an intermediary link.
Is free. For placing the project on such exchanges, borrowers do not pay any fees. Plus to this - you set the expected size of the interest rate and choose investors.
Conveniently. You save time and money, because you can manage investor search remotely, directly through an online office in your office or at home.
The only drawback of the vast majority of online loan sites is that absolutely everyone can place the project there, and no one provides support and does not help borrowers to objectively evaluate their business in order to increase its attractiveness from the point of view of potential investors. As a consequence, on the one hand, the interest and trust of those who want to invest money is reduced, and borrowers are in no way protected from scammers or simply unscrupulous investors who can make known demands to you, using your ignorance.
However, such online loan sites, which, with all the above advantages (15% interest rates, the possibility of independent choice of investors, free placement of borrowers' projects, etc.), were able to organize the process of interaction of borrowers with investors in such a way that it became Profitable, affordable and absolutely transparent for both parties:
Reliability. All borrowers must pass verification by technology of the European Bank for Reconstruction and Development. For borrowers, this gives an opportunity to really assess the prospects of their business, investors - guarantees of return and profitability of the invested funds.
Objective assessment. Even if you are not officially registered, your solvency can be determined on the basis of management accounting analysis . If necessary, a specialist can leave for you to assess the reliability of your company and the real situation on the spot.
Honesty and transparency. Relations between borrowers and investors are built exclusively within the framework of the Federal Law. When you make out the loan agreement, no one will ever ask you to arrange an apartment for a company employee or to turn in a car for parking. The Borrower is fully protected from unlawful acts that may damage his business and property.
A pool of proven investors. The opportunity to get a loan is cheaper and faster. There are a large number of investors interested in investing in projects that are allowed to publish online loans. Due to long and in most cases repeated cooperation, registered investors fully trust the formed system of risk assessment and financial attractiveness of projects.
Summary
Internet sites provide an opportunity to get a loan for business development independently, as quickly as possible, without resorting to intermediaries and much more favorable terms. As a result, non-bank private loans are gaining popularity, as with this form of relationship, you do not overpay for a loan, paying bank risks, their expenses for maintaining A-class offices and sky-high premiums of top managers.