Data shows us that about 80% of small business loans a being rejected by major banks, while the more flexible SBA loan program is still only approving about half their applications.

However, there isn’t any reliable data to measure how many small business owners don’t even bother applying because they think it’s a waste of time. They suspect or they know that they will be rejected. So they don’t want to waste the time and effort it will take to apply.

In the world of entrepreneurship, there are no real universal truths. So, it’s unfair to say applying for a small business loan is a waste of time.

However, you should probably look into other options, if…

Your Business Needs the Money Urgently

Disasters come without warning. And sometimes timely opportunities pop up with a very small window to act. If you need money in either situation, the big banks and the SBA loan program are not for you. They can take weeks or even months.

The SBA does have a disaster assistance loan for people who have been impacted by a catastrophic natural disaster. This can be a great option if your business (or home) has been hurt by a (SBA-declared) disaster in your area. But it’s no help if you are having your own smaller level disaster like a business-driving piece of equipment dying.

For fast turnaround times, you’re likely better of contacting a merchant cash advance company to get the help you need. A merchant cash advance (MCA) application can be done completely online, so there is no need to book an appointment with anyone. And you can have your reply within 24 hours.

You Have Damaged Personal Credit

Both the major banks and the SBA lenders will take a close look at the credit history of all of the business’ would-be owners. A credit score below 780 may be enough to take the banks off of the table completely. The SBA lenders have more forgiving lending criteria, but they will still very much look at your personal finances.

If your personal credit history isn’t where they would quite like it to be, you may be asked to:

This is obviously a risky proposition for a lot of small business owners. Start-ups have to fold for countless reasons beyond the founders’ control. If one of these things happens to your business, your personal finances and credit can be ravaged because you’re personally on the hook for this loan. Some people even lose their homes.

If your business has been around for a few years (minimum 4) and you have solid credit with steady revenue, applying for a small business loan can be a great way to grow your business or take it to the next level.

However, if you urgently need money for a crisis or opportunity, you should look elsewhere. At the same time, if you’re personal credit is less-than-perfect and you don’t want to expose your personal finances to too much risk, this could be another reason to look elsewhere.

Knowing these things in advance can save you a lot of time, effort, and even heartbreak.