One option for injecting money into one’s business is to get a business loan. However, it can be challenging getting approved for such a loan. A recent Biz2Credit study indicates a couple of things about the likelihood of being approved for a business loan here in California.
One is that California has one of the higher small business loan approval rates in the country. The study looked at over 50,000 business loan applications to determine the rates of the different states. The applications were from the past 12 months.
It then ranked the states on the basis of this rate. The study found the loan approval rate for California-based businesses to be the nation’s fourth highest.
Another thing the study indicated though is that there are a great many business loan applications by businesses in the state that are not approved. The study suggests that, even in the states with relatively high approval rates, the number of business loan applications approved is fairly low. In the state the study found to have the highest loan approval rate in the whole country, New Jersey, a little less than a quarter of applications from businesses in that state were approved. In California, the approval rate was a fair deal lower, coming in at 14.2 percent.
So, despite California’s high rank in the list, getting a business loan is something many small business owners in the state still may find quite difficult. In some cases, it might simply not be an option that is realistic for a business or a good fit for the company’s current situation.
Now, there are alternatives to loans that business owners can pursue if their company is in need of an influx of funds. A few examples include crowdfunding, finding a business partner or bringing investors into the business. As a note, these alternatives can have their own set of challenges and issues connected to them. For example, some can raise some complex and impactful legal matters. Business lawyers can assist business owners with addressing such matters and with being aware of what pitfalls it is important to avoid when it comes to them.
Source: Small Business Trends, “How Does Your State Stack Up for Small Business Loan Approval? Study Reveals More,” Shubhomita Bose, July 27, 2017