Applying for small business financing can be time-consuming and frustrating. Research from the Federal Reserve Bank of New York shows the average small business owner spends more than half a standard work week (26 hours) researching and applying for financing.
Unfortunately, putting in that time and effort doesn’t always pay off. The Nav American Dream Gap Report survey found that 45% of small business owners whose applications for financing were declined said they were turned down more than once. And research from the 2014 Joint Small Business Credit Survey found that in the first half of 2013, a quarter of firms with employees and nearly a third (31%) of those without employees didn’t even bother to apply because they didn’t believe their applications would be approved.
While no one wants to be rejected when they apply for credit, small business owners are at a particular disadvantage because major consumer protection laws don’t always apply to entrepreneurs seeking financing for their ventures.
Here are three things that may come as a surprise when they apply: (more…)