The process of getting a traditional bank loan for your small business is frustrating. It’s nearly impossible to get a banker’s attention if you have questions. You are expected to fill out a long, complex application on your own, submit all of the supporting documentation that is required, and then wait. And wait. And wait. If you are lucky, two or three months later you get a decision – and when it comes to banks, it’s rarely good news.
Why does it take so long? Is there a faster way to get cash for your small business?
Banks are not adventurous
Steve Jobs started Apple in his garage. Jeff Bezos started Amazon the same way. Today, these companies are two of the most successful in history. However, it is unlikely that either of these entrepreneurs could have gotten a traditional small business loan in their early days. Banks just aren’t adventurous.
Banks are worried that you will default on your loan, and they won’t get their money back. This is based on statistics, as many small businesses do fail in the first five years. Banks simply don’t want to take the risk. That means they only lend to extremely well-qualified applicants. You have to complete a lengthy application and supply extensive documentation to prove that you are likely to pay the loan back. Often, your application is reviewed by a long list of small business bankers before a decision is made. That can easily take 60 to 90 days.
What about a Small Business Administration loan?
The federal government knows that banks don’t want to lend money when there is a risk. However, the government also knows that small businesses are critical to the country’s success. The Small Business Administration (SBA) offers a compromise. If you borrow from a bank through one of the SBA programs, the SBA guarantees your loan.
Of course, a guarantee like that comes with strings. The biggest one is the amount of documentation you have to provide. This is just a taste of what the SBA requires before guaranteeing your loan:
- Comprehensive business plan
- Credit check
- Financial statements
- Owners’ resumes
- Details on collateral
Getting the paperwork together is time consuming for you. It takes even longer for the SBA and the bank to review it. For many applicants, 60 to 90 days is a best-case scenario. Sometimes it takes longer to get an approval.
The problem with this lengthy application process is that you can’t handle small cash flow problems promptly, and you can’t take advantage of growth opportunities if an unexpected chance comes your way. Fortunately, there is good news. It doesn’t have to take a long time to get the funding you need for your business.
Fast funding solutions
The beauty of technology is that you can cut out lots of time-consuming steps when it comes to submitting an application. You can speak to a loan officer by phone and submit your information online in minutes. Thanks to new financing tools, non-traditional lenders don’t need as much documentation to make a solid credit decision. Sometimes, all you have to provide is basic identification and a few months’ worth of bank statements from your business account.
Rapid Finance is a leader when it comes to leveraging the power of technology to make fast credit decisions for small business owners. Many borrowers have the money they need in just 24 hours. If you need cash for your business, you don’t have to wait months for a decision. Call Rapid Finance at 800-631-3370 today.