How Hard is it to Get a Small Business Loan?

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How Hard is it to Get a Small Business Loan

For many entrepreneurs, their first venture into business is wrought with questions and challenges. Despite the exciting payoff of owning your own business, getting it off the ground – especially in the early stages – can be a monumental task. From creating a business plan to establishing a source of funding, starting your own business isn’t for the timid. Often, obtaining a small business loan and/or raising money is the most difficult, stressful part of the entrepreneurial process.

How Hard is it to Get a Small Business Loan?

Traditional bank loans have earned a reputation for being notoriously difficult to secure, and for good reason. Here are just a few things that a traditional bank considers when evaluating you as a candidate for a business loan:

Your business experience

For start-ups, having a lack of clear experience in the industry can be a disqualifier, at least in the eyes of the bank. Despite the growing popularity and astronomical success of many start-ups today, banks often aren’t willing to take the risk. That’s left mostly for venture capital firms.

Your credit history

Expect to have your credit history and score picked apart with a fine-toothed comb.

Your current cash flow

Even if you have a solid business plan that demonstrates a strong potential cash flow, the bank typically wants to see proof of an already-existing cash flow. Typically they’ll want three years of proven success, which is tough to show with an early stage venture.

Legal and tax liabilities

The bank will consider whether your business may have any financial or legal risks, which can often be a fairly subjective viewpoint.

Personal Guarantees

Unless your business has strong cash flows and considerable profit, the bank will want you to personally guarantee any financing they offer you, and this leverages the future of you and your family.

Are there Alternative Options to a Traditional Loan?

Entrepreneurs are often known as smart, outside-the-box thinkers, so it makes sense that there are a growing number of small business owners seeking alternatives to the traditional, frustrating bank loan process. Leveraging the value of personal assets like jewelry, diamonds, watches, collectibles, real estate, vehicles, and more, is an ideal way to establish loan collateral. Things that are simply sitting around your home can open the door to the small business loan you need to make your business dreams a reality.

How The Lux Exchange Can Help

At The Lux Exchange, our online-based process allows our clients to avoid the hassle of bank loans and obtain a solid cash flow without credit checks, mountains of paperwork, or hours of invasive questioning. We accept a large variety of luxury assets, and our efficient process ensures that clients receive funding within 24 hours.

The Lux Exchange is an excellent funding partner for entrepreneurs who want a smarter, simpler alternative to traditional bank loans. If you’re interested in unlocking the value in your assets, or are interested in learning more about our process, contact The Lux Exchange today.