8 ways to overcome a ‘no’ when searching for funding
Many businesses rely on external funding to support their cash flow. The importance of securing funding for many businesses can make getting a ‘no’ even more frustrating.
Being rejected for funding can be disheartening, to say the least, but don’t let it deter you from trying again. There are many different funding options that are suited to different businesses.
Here we offer 8 ways to overcome a ‘no’ when searching for funding and increase your chances of securing the right facility that can help your business in the long term as well as the short term.
1. Be professional
After a rejection it can be tempting to release your frustration at the person standing in the way of your goals. But always remember to behave in a professional manner as these decisions are made on a number of factors, and chances are there will be funding out there that’s better suited to your business.
Try to determine exactly why you were rejected and then politely thank them for his or her time. With this information you can then review the reasons given and get to work on addressing them. This will give you a much better chance of securing funding in the future. It may also be that whatever prevented you from seeing that funding application accepted, for instance a lack of trading history or a poor credit report, isn’t a factor for other funding facilities.
2. Don’t give up
It’s important to recognise early on that a ‘no’ doesn’t necessarily mean ‘never’. Often the search for funding will lead to a few dead ends which can leave you feeling demoralised and unmotivated to continue. But don’t give up.
There is a wide range of funding methods and just because one option doesn’t work for you doesn’t mean that the right funding isn’t out there. Often you’re just not looking in the right place.
3. Remember why you’re looking for funding
Knowing why you’re looking for funding could give you the motivation you need to keep searching and also help the potential funder to understand your goals. Try and consider the details of how the money will be used.
Will it be used to pay rent, suppliers, or employees? Maybe you need to invest in new developments or products as you adjust your business post Covid-19?
Whatever your reasons for seeking new funding, keeping the end goal in mind will help you stay motivated to achieve your aims even when faced with rejection. Our raise funding and manage cash flow sections could help you find the right funding solution to meet specific goals.
4. Have an open mind
While the government has launched loan schemes to support businesses, there are plenty of other options available that could work better for your business.
While a business loan can be a good way to boost your cash flow quickly, it doesn’t suit all businesses, and options like invoice finance can also support your cash flow without leaving you with costly monthly repayments in the future.
5. Overcome the “not good enough” syndrome
Being rejected can lead business owners to feel that they aren’t good enough and this holds them back from continuing their search.
Often a company’s fear of rejection is unnecessary and, whilst plenty of alternative options are available, they’re too afraid to investigate further because they fear they will be rejected again. Once you remove the barrier of fear, you will open your business up to many more options.
6. Increase your chances of securing finance
When lending statistics show a decline, much of the blame is laid squarely at the door of the high street banks and other lending institutions. But there are a few things that businesses can do to make themselves a much more attractive proposition to lenders.
For example, refining your business plan to make sure it portrays where your business is heading and what your future strategy is – as well as accurate financial forecasts – will put you in a better position when talking to lenders.
7. Improve your credit score
When banks consider lending, your credit score and how big a risk they believe your business to be are important.
Find out what your credit score is and make a conscious effort to pay bills and invoices on time to ensure it’s the best it can be. Improving your financial standing may enable you to negotiate a better rate.
8. Talk to a broker
The process of finding funding for your business can be hard work. With so many types of funding available, the search for funding can feel like an insurmountable task, especially for businesses which are already under pressure with other aspects of their day-to-day activity.
A commercial finance broker will listen to your funding requirements and understand your plans for the future before introducing the facilities and lenders that will enable you to achieve them.
If you’re looking for a new funding facility, contact Hilton-Baird Financial Solutions to discuss your requirements by calling 0800 9774833 or requesting a call back at a time that works for you.