Need a business loan? The struggle to get a loan is real and you’re not alone there.
64% of employer firms experienced financial challenges in the last year alone.
But you’re probably wondering, ‘what are my chances of getting a loan?’.
Securing business funding isn’t a walk in the park. And with 44% of employer firms admitting that securing funds for expansion was a ‘financial challenge”, it’s time to get to the bottom of your likelihood of getting a loan and better yet, learn how to improve funding chances for your business.
But first, the facts – Loan approval odds:
The loan approval odds facts speak for themselves.
- 60% of applicants had a financing shortfall – meaning, they received less financing than the amount they applied for according to CBC Insights Report
- 23% of applicants did not obtain any financing at all (according to Federal Reserve banks SMB credit survey)
- Majority of business loans applied for occur at the bank (46%) – however, those applying to online lenders has grown over time (now 24%)
- Approval rates for online lenders are high – at around 62%, far higher than the approval rate at the bank!
Reasons why business funding is denied:
The majority of business loan applicants denied funding all come down to insufficient credit history, debt and a low credit score. Take a look at the graph below…
Graph source: Federal Reserve banks SMB credit survey
And this is where LendingScore™ comes in to play working to boost your loan approval chances. How? Let us show you…
What is LendingScore™?
LendingScore™ is a score between 0 and 100 that details how likely your business is to receive funding. The higher your score the better your funding chances are.
What your LendingScore™ means:
For those in the United States, think about how your credit score works – it’s a number calculated by a model to show your capacity to pay a loan back. It’s the risk that a lender takes when you borrow money, the higher it is, the more attractive you are to the lenders. Your LendingScore™ works in a very similar way but differs, because it takes into account many more factors that are relevant for online lenders.
The score is calculated using Become’s patented technology and is created after the analyses of four major components:
- Credit score (only for those in the U.S)
- Business age
- Business financials (bank account status)
- Monthly Revenue
These four components are the four main funding factors that lenders use to analyze your business and determine whether or not you are eligible for a loan.
For businesses in Australia who don’t have a credit score, your LendingScore™ will be calculated from three major components (numbers 2-3).
How can I find out my LendingScore™?
When a business owner applies for funding via Become, after completing the online application, whether your business was provided loan opportunities or not, you’ll receive your free LendingScore™ Dashboard.
Your LendingScore™ Dashboard will look like this:
This dashboard is specifically tailored to your business and is your go-to place to see all the factors that combine to improve funding chances for your business.
How can LendingScore™ improve my funding chances?
Not only does LendingScore™ provide a nice personalized financial summary of your business, but it can also improve your funding chances.
Your LendingScore™ Dashboard will provide you with a plethora of tips, articles and even an e-book dedicated to the area of your LendingScore™ that needs the most work.
You’ll receive personalized tips, actionable tasks as well as recommended tools to help your business increase its chances of getting a loan and unlock new funding opportunities.
Using your dashboard, you’ll be able to increase the attractiveness of your business to lenders to ultimately help you open the door to new funding opportunities for those who couldn’t qualify for a loan before and also help to get better terms for those who did manage to get funding the first time around.
SMBs who apply for funds using Become’s tailored funding solution are around 20% more likely to receive funding
Got any questions about LendingScore™?
Comment below or contact us on: email@example.com