“There is no intoxicant more dangerous than cheap money and excessive credit.”
-Benjamin M. Anderson, Economist
Why It's So Hard to Find Good Business Financing?
Accessing the right kind of business financing is one of the most significant challenges for businesses, regardless of size or industry.
While capital is the lifeblood of any enterprise, securing it on favorable terms often feels like navigating a maze with countless dead ends.
But why is it so hard for businesses to find good financing?
Let’s face it: finding good financing for your business can feel like an uphill battle.
The truth is, many businesses make the same mistakes or run into the same roadblocks when it comes to securing the money they need to grow—or even survive.
If you’re struggling to get the right financing, you’re not alone. But the hard truth is, without the right approach, you’ll stay stuck in a financial rut.
Here’s why it’s so hard to find good financing and what you can do to turn things around…
Lack of Financial Knowledge
Most business owners don’t understand the financial world they’re stepping into.
They dive in blind, hoping for the best, and end up with the worst.
High-interest loans, hidden fees, and bad terms aren’t accidents—they’re the result of not knowing better.
What to Do:
Stop guessing and start learning.
Understand what’s out there, from term loans to lines of credit, and know how to compare options.
If you don’t have time to learn, work with someone who does, like a business financial advisor.
Being Unprepared
Showing up to a lender with incomplete financial records, unrealistic projections, or no clear business or cash flow plan is a recipe for rejection.
Lenders don’t care about your excuses—they care about your numbers and your ability to repay.
What to Do:
Get your act together. Keep your financial records up to date, develop a solid business plan, and make sure you can back up your numbers. If you can’t do this alone, get help.
Poor Credit History
A bad credit score or a history of missed payments can ruin your chances of getting good financing. Lenders don’t want to take a chance on someone who’s proven to be unreliable.
What to Do:
Fix your credit. Pay off debts, don’t miss payments, and check your credit report regularly to dispute any errors. It’s not fun, but it’s necessary.
Lenders Think You’re a Risk
If your business is new, in a volatile industry, or has inconsistent or negative cash flow, lenders see you as a gamble they’re not willing to take.
What to Do:
Prove them wrong. Show consistent revenue, strong growth potential, and a plan to manage risks.
Building relationships with smaller banks, credit unions or private investors can also help, as they’re often more flexible.
Falling for Predatory Lenders
Desperation leads to bad decisions. Predatory lenders prey on businesses that are out of options, offering fast cash with sky-high interest rates and impossible terms.
What to Do:
Do your research. Read the fine print. If something seems too good to be true, it probably is. Stick with reputable lenders and get advice before signing anything.
The Economy Isn’t on Your Side
Sometimes, it’s not your fault. During economic downturns, lenders tighten their wallets, making it even harder to get financing.
What to Do:
Plan ahead. Secure financing when the economy is stable, not when you’re in the middle of a crisis. Diversify your funding sources so you’re not reliant on just one option.
You’re Already Drowning in Debt
If you’re overleveraged, lenders will hesitate to give you more money. They don’t want to be last in line when the bills come due.
What to Do:
Start paying down existing debts. Look into restructuring loans for better terms. And consider equity financing instead of piling on more debt.
You Don’t Know About Alternative Financing
There’s more to financing than just bank loans, but many business owners don’t know their options. Crowdfunding, peer-to-peer lending, and government grants are just a few alternatives that might be a better fit.
What to Do:
Open your eyes to what’s out there. Research different financing methods or work with an advisor who knows the landscape.
You’re Too Focused on Short-Term Fixes
Cash flow problems can make you desperate, but grabbing the first loan you can find isn’t a solution—it’s a trap.
Short-term fixes often come with long-term pain.
What to Do:
Think strategically. Look for financing that aligns with your long-term goals, not just your immediate needs. And don’t make rash decisions without weighing the consequences.
Finding good business financing is undeniably challenging, but it’s not impossible. By understanding the barriers, preparing thoroughly, and seeking expert guidance, businesses can navigate the financing landscape and secure the resources they need to thrive.
Don’t let financing woes hold your business back.
Take control of your financial future by addressing these challenges head-on and exploring all available options.
If you’re feeling overwhelmed, consider partnering with a business finance advisor who can help you strategize and find the right solutions tailored to your needs.
Remember, the right financing isn’t just about surviving—it’s about positioning your business for long-term success.
Click here: to setup an introduction meeting to discuss your situation and next best steps.
Bernarsky Advisors
Business Finance and Strategy Advice
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WHAT IS THE BEST AND SAFEST WAY FOR YOUR BUSINESS TO DEAL WITH BUSINESS DEBT PAYMENTS WHEN YOU CAN’T GET REFINANCED?
It is NOT by stopping ACH payments.
It is NOT by taking on another business loan.
It is NOT ALWAYS a Refinancing
It is NOT by entering into a debt settlement program.
Find out the BEST strategies to get your Business back to where it was
Setup a brief meeting with a business finance & strategy expert to discuss all of your options!
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