Delhi, , India
Corporate Finance, Finance
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What To Do If Your Business Loan Application Is Rejected
A business loan application may get rejected due to different reasons, but the key to doing something about it is knowing why. This way you have a chance to work on the shortcomings, whatever they may be, and ensure that you are better prepared for the next time.

The things to do when your business loan application is rejected are:

Know the reason for rejection
Find the next best alternative for business funding
See whether your financials can be improved
Check if other loans can be availed
Try to improve your credit score
Ensure that your business plan is viable

Let’s examine each one in detail:

Known the reason for rejection: Contact your lender and ask for the reason for rejection of your business loan application. Also find out how your application could be improved. Talking to your lender’s representatives is invaluable as they will be able to give you essential pointers on your shortcomings and let you know what you could do better next time.

Find out the next best alternative: It is always better to have a Plan B as it is difficult to predict market trends or lending policies. There are many viable alternatives available to SME owners such micro financing and lending, NBFC loans, loans from friends or family, etc. So think about alternate ways to arrange for business finances.

See whether your financials can be improved: Is your business not showing sufficient profits? Was it too soon to apply for a business loan? Consider questions like these and try improving your business financials. Perhaps insufficient financial backing was the reason for your Business Loan application to be rejected.

Check if other loans can be availed: As they say, when life closes a door, it opens a window. So try seeing if there are other options available like taking a personal loan or a gold loan to finance your business.

Try to improve your credit score: Sometimes a loan may get rejected on the account of your low credit score. Try to find ways to improve your credit score by paying off any pending debt or by repaying loans on time. If you have a number of credit cards, make sure that you have paid all the dues and your credit card statement does not reflect negatively on your financial status.

Ensure that your business plan is viable: Lenders analyse your business plan before approving your business loan application and study it to see how it would generate returns. So if you think your business plan wasn’t thorough, spend some time on it and focus on whether your business has good scope for profits and how a business loan can create more opportunities for you.

When you need a Business Loan, look no further than Bajaj Finserv, which offers easy online eligibility for SMEs along with nominal interest and flexible repayment options.

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