It can be difficult to stomach if your business needs funds but is denied a traditional lender loan. Fortunately, you have options. There are many alternative types of financing available. Take a look at these options if you were denied a loan:
SBA Loans
SBA loans are designed for small businesses to obtain financing even though they have been denied conventional loans. These loans are overseen by the federal government and are available from many local lenders.
Franchise Financing
If your business is a franchise, you may be able to obtain a franchise-financing loan. They are commonly used when providing financing is denied by the franchisor and obtaining traditional bank loans becomes problematic.
Merchant Cash Advances
Merchant cash advances are another option. Working capital or cash is given to businesses when they need it, based on their future credit card receivables’ selling. In return, the selling firm receives a lump sum of working capital to cover their operating expenses.
Accounts Receivable Financing

Accounts receivable financing, also known as factoring, is a financing option in which a financing company purchases your accounts receivable invoices at a discount. This is not a loan, and you do not go into debt. Instead, you are selling an asset. In a real way, it’s like outsourcing your accounts receivable department and is something to explore if you are denied a loan.
Purchase Order & Trade Finance
Purchase order finance is generally related to a specific transaction or purchase order. The financing of purchase orders provides cash to allow a business owner to acquire materials or supplies needed to complete a customer’s order.
Bridge & Hard Money Loans
Hard money loans are a specific type of asset-based financing. They are a short-duration financing option and are generally used to finance commercial projects, which are backed by the property’s value instead of the borrower’s creditworthiness. Keep in mind that hard money loans cover a lower percentage of the total value than a traditional loan. This is because of a perceived higher probability of default.
Bridge loans are for businesses that are going through a transition period and generally do not qualify for traditional bank loans.
Asset-based Lending
Asset-based lending is one of the most popular types of financing for business acquisitions and mergers. It can provide quick working capital to businesses that need funds to expand or rebuild because of their growth but lack the cash flow to cover the upfront costs. Businesses obtain asset-based lending by offering a percentage of the company’s assets as collateral.
Unsecured Business Lines of Credit
Unsecured business lines of credit can help businesses obtain working capital for any number of short-term projects. Unsecured business lines of credit are usually not secured by collateral. They are designed to provide short-term cash flow for unplanned expenses while engaged in the business’s normal course. These can make all the difference to the smooth operation of your firm.