When Your Bank Won't Make a Business Loan

When Your Bank Won't Make a Business Loan
Study alternative financing sources such as angel investing groups, crowdfunding sites, and microfinance organizations, then prepare to prove you're worth betting on

By Karen E. Klein

On two occasions, I’ve been turned down for a startup loan by my banks. One told me I had to be in business two and a half years to get a loan and the other turned me down because I have a bankruptcy in my past. I have this sincere and all-consuming desire to open my business and make a good income from it. Where can I go for financing? —D.L., San Luis Obispo, Calif.

Small business lending has been tight for the past few years, due to a combination of stricter lending standards embraced during the financial crisis and a downturn in loan demand. Although U.S. commercial lending is on an upward trend this year, startup business funding from banks tends to be nonexistent, even in the best of times.

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