We all know it’s still tough out there to get a bank loan as a small business, particularly a startup. Turns out, it’s a lot tougher to get a loan approved at a select few of the nation’s largest banks than it is in general.
A new study of 1,000 rejected small-business loan applicationsconducted by credit marketplace Biz2Credit found the turn-down rate varies greatly between institutions.
Overall, the lending environment still looks dicey, with the most recent National Federation of Independent Business optimism survey showing more entrepreneurs with a negative outlook on obtaining credit.
Which banks rejected the most loan applications in the survey? Here’s the top five:
The top three here are really of most interest, as the percent of rejections drops off steeply from there.
The reject rate at BofA, JP Morgan and Wells Fargo likely is in part a result of entrepreneurs smelling blood in the water. Loans are getting made at these big banks, so more owners are applying there.
One thing’s clear — if you’re looking for a loan for your business right now, have your financials cleaned up and looking as sweet as possible. Then, don’t be surprised if you need to apply to more than one bank to find a lender willing to help.
Finally, make sure your business can afford to take on this debt — interest rates for small-business loans aren’t cheap right now.
Contact us for all of your funding needs.
“Your Success is Our Business”