How to Get Alternative Lending When a Bank Denies Your Loan

Getting your bank loan application denied is nothing short of disappointing. If you need money to run and grow your business, the denial can feel crushing. Fortunately, bank loans aren’t your only option. Here are a few alternative lending options to consider.


Crowdfunding is a financing option that involves getting money from multiple people. You present your ideas and business strategy using an online platform (Fundable, CircleUp, Kickstarter, LendingClub), and interested individuals can decide whether or not to invest. With most crowdfunding platforms, you do need to provide a reward or equity in your company in exchange for funding.

Angel Investors

An angel investor is an already successful business owner with extra capital that they want to invest in another business. You do need to be prepared to show why your business is worth the investment. A well-written business plan is a must. Many angel investors also like to get hands-on with their investments. He or she may monitor your progress or offer advice to help you succeed.

Venture Capitalists

Venture capitalists are private equity investors who provide capital for promising small businesses in exchange for a stake in equity. In addition to investing, they also provide mentorship and advice.


If you don’t need a significant amount of funding, you may be able to get approved for a microloan. Microfinance companies tend to have fewer requirements, and they’re more lenient than traditional banks. These companies only fund smaller loans (no more than $50,000), and the loans may be more expensive than a bank loan, but they provide a good alternative lending option for small businesses in need.


If you’re a start-up business, getting financing can be particularly difficult. Instead of searching for funding through a lender or other company, you can bootstrap. Bootstrapping involves financing your business using your own money.

The benefit of bootstrapping is that you don’t have to worry about taking on debt and making repayments while you’re trying to get your business off the ground. As you make money, you can reinvest your profits to grow your company. If you need financing later on, after you’ve been in business for a while, you’ll have an easier time applying for a loan.

If a bank denies your loan application, it doesn’t mean you’re out of luck. With research and hard work, you can find an alternative lending option that works for you and your business.

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