Contrary to popular belief, being turned down for property development finance is far from uncommon. It’s just that when it happens to you personally, you feel as though you’re the only one in the world facing such troubles.
Regardless of what it is you need the capital for, there are generally four main reasons why applicants are refused assistance by any given service provider, which are as follows:
- Your Credit Score. If your credit score simply isn’t up to par, chances are very little else will matter in the eyes of the lender.
- Your Current Business Position. You may have a fantastic credit history, but if the lender doesn’t believe that your business is currently in a suitable position to warrant the loan, you will probably be refused.
- Your Request. Alternatively, it could simply be that you have requested too much money, unacceptable repayment terms or anything else the lender deems unsuitable.
- Your Choice of Lender/Product. Lastly, it could simply be that you have made a poor choice in terms of the lender you have chosen to work with, or the actual development finance package you have applied for.
So that’s the basis of the problem outlined, but what about the solution?
The good news is that no matter how many times you have been turned down, there are always alternative avenues to explore. There are certain issues that may stand in your way and make life difficult, but there is never such a thing as reaching point where there’s nowhere left to turn.
So if you do find yourself in a situation where you have been refused financial assistance, consider the following and you may be able to gain access to the required funding elsewhere:
- If your credit score is the problem, it isn’t a problem that is just going to go away on its own. Find out exactly what it is that is blighting your credit record and begin making the necessary changes to put it right.
- If you have only applied for generic development finance products via everyday lenders, you might want to think about the various alternatives intelligent financial solutions available. These are exactly the kind of instances in which bridging loans, for example, have the potential to represent highly accessible, affordable and cost-effective solutions.
- There are always alternative options to explore outside the usual borrowing spectrum. Examples include crowd funding, peer-to-peer lending and seeking the involvement of private investors.
- It’s also worth carefully reconsidering exactly how much you need, what you need it for and when/how you can guarantee the sum’s full repayment. If it’s possible to get by with considerably less and pay it back quicker, you may find more lenders are willing to help.
- Never overlook the possibility of obtaining a secured business loan, which assuming you have the required collateral to put up as security can be much easier to obtain than an unsecured loan.
- Last but not least, it’s advisable to immediately get in touch with an experienced and reputable independent broker, in order to obtain professional guidance and assistance on all aspects of property development finance. Rather than repeatedly trying and failing on your own, why not get the professionals to lend a helping hand?