How Are Generation Y SMEs Fighting Back Against Business Loan Rejections?

The importance of funding in business is something that sits on page one of the proverbial entrepreneurial bible. Sadly, this is one area where millennials are being wrongly punished by the banks due to the mistakes of previous generations. Unsurprisingly, this issue establishes a whole host of new obstacles. On a brighter note, the creative SME owners are blessed with opportunities to overcome those issues.

Statistics show that up to 40% of business loan applications were rejected last year. Early forecasts suggest that this figure will slowly increase over the coming years. Here’s what victims of this problem are doing to keep their dreams on track.

The Growth Of Alternative Funding

Borrowing money through friends and family is hardly a new phenomenon. Young entrepreneurs have loaned money from loved ones and independent backers for generations. Nonetheless, the digital age has opened new doors for those with the brightest ideas and greatest determination.

The concept of crowdfunding is still relatively new in the grand scheme of things. However, these success stories underline how successful this strategy can be. In addition to obtaining funds, this can be the ideal method to grow an organic audience. With capital and clients in place, half of the battle has already been won.

In truth, there are several other routes for modern SMEs to take. Either way, those new and evolving opportunities have played a crucial role.

The Reduction Of Overheads

Modern business is a complex arena. However, the formula sitting at the heart of those endeavours could not be simpler. If the revenue generated by the venture outweighs the company’s expenditure, sustained success is on the cards. Increasing the sales figures aspect of that equation isn’t always easy. This is why the smartest entrepreneurs are cutting the costs instead.

Online tech and communication allow many businesses to start their lives from home. Meanwhile, short-term office rentals and shared spaces can reduce the overheads too. When combined with other ideas such as outsourcing and negotiating on services, the costs fall dramatically.

Creating winning connections and using ideas like 3D printing and paperless offices, the costs are lower than ever. In turn, this removes a great deal of pressure from the owner’s shoulders.

The Growth Of Online Sales

While smaller overheads increase the profit margins, businesses still need to focus on sales. Online shopping has become a major part of our daily lives. Frankly, reaching this sends scalability opportunities through the roof. Those businesses that make the most of them are destined to overcome any issues related to funding.

Essentially, the world of business is a smaller place than ever before. As such, more companies are going global too. Reaching larger audiences on a 24/7 basis allows SMEs to compete with the universal giants. Also, creative marketing schemes no longer need to break the bank, which is another crucial factor in levelling the playing field.

Without those online selling possibilities, an even greater number of startups would fail. As things stand, they do have a fighting chance.

The Increased Speed Of Access To Money

First and foremost, international payment gateways are faster than they were in previous decades. Meanwhile, the growing acceptance of tech features like Ripple will only further boost this. Even if the cryptocurrency itself fails to emulate Bitcoin in reaching the mainstream, quick processing is vital for SMEs.

Crucially, though, entrepreneurs now have access to cashflow finance opportunities. Gaining quick access to funds that are technically tied up in the invoicing system is key. After all, this allows companies to start accepting repayment plans far sooner. Therefore, disruptions of this ilk can now become a thing of the past for those in the know.

Fast services are something that modern consumers expect. In many ways, those systems to maintain a regular flow are far better than bank loan capital anyway.

The Final Word

Millennials do face more obstacles than business owners of yesteryear. The competition is fiercer than ever while clients expect more too. In truth, the limited access to cash through bank loans is the least of their worries. On the other hand, though, the facilities and tech systems are far more advanced too.   

Make no mistake; success in the modern business arena isn’t easy to find. However, those financial hurdles no longer need to be the deciding factor. With the right mindset and innovations, breaking through those walls to achieve the intended goals is well within reach. For those that do manage to find the winning formula, the rewards are simply incredible.