A new survey by TD Bank reveals 21% of small businesses have sought, or will seek a small business loan in the next few months. Most of them (72%) will approach their primary bank. Little do they know, over 80% will be turned down. With over 30 million small businesses in this country, that's a whole lot of NO's!
Other Findings from the 2017 TD Bank Small Business Month:
About 46% expect to increase revenue or sales in the next year. A majority of them (80%) feel confident managing their business finances.
But Challenges Persist - A segment of small business owners (11%) however admit they don’t know how to seek credit when they’re ready. For 34% of them, their low personal credit score has affected their ability to get business credit in the past. Worse still, 69% of entrepreneurs don’t even know about business credit scores, or realize they have one.
Whether you are planning to expand your business or fulfill more orders, you may find yourself in need of funds.
Before approaching a bank, it’s best to be prepared and have all the information at your fingertips. For example, it’s extremely important for you to be aware of your business credit score. A business credit score reflects your company’s creditworthiness. So apart from impacting your ability to get approvals for loans, it influences commercial partners when they determine extensions of lines of credit.
If you find out your credit score is negative, there are ways to fix it, too. You may, for instance, limit your credit usage and learn more about soft credit inquiries. These are simple steps that can make it easier for you to fix a negative credit score and secure capital.
TD Bank surveyed 553 small business owners with less than $1 million in annual revenue for this study.
Nobody faces more challenges on a daily basis than business owners. In fact, for owners of small and medium sized businesses, handling many different challenges is the source of great satisfaction and some headaches, too.
But when business owners are asked to name their greatest challenge, one thing tends to top the list most often; accessing working capital to manage cash flow. In other words, making sure there is enough capital flowing in to cover everything that needs to flow out.
There are a variety of reasons why cash flow can be a steep challenge for small business owners. Needs can precede revenue. Or perhaps you’re getting paid more slowly than you’d like. Or if you’re a seasonal business, a garden center, for example, or specialize in hardy, cold weather clothing and you have peak sales months which require that revenue to stretch across your off-season months.
Often, business owners can optimize cash flow by negotiating longer payment cycles with creditors and encouraging debtors to pay in shorter time periods. But there are other solutions that can help you sail through the lean months with plenty of working capital on hand.
I hope you found this useful. If you would like to read more on this topic, I would suggest the following link: Insight into the nature of business borrowing and when small businesses owners can gain the most benefit from it.