My bank turned down my small business loan application. What do I do now?

First, don’t despair. This situation is all too common for so many small businesses across America. Traditional lenders are often concerned with the risk involved in small business loans and unwilling to take a chance on a loan that might require seizing assets or foreclosing on property to recover the money.

Second, don’t google “How to get a small business loan.” While you will likely come up with some helpful, informative articles (like this one), those results will be preceded by a slew of ads from online lenders promising hassle-free applications, no hidden costs and approval in minutes.

Also known as fintech lenders, these lenders use online platforms to directly lend to businesses or to connect businesses seeking financing with investors willing to buy or invest in the loan. Online-only lenders can provide loans even if you don’t have perfect credit, but some of these lenders charge very high interest rates and expensive fees (learn more about loan types). While online lenders are required to follow federal and state consumer financial protection laws, the laws are not as clear and streamlined for online small business financing, which enables some to work around the rules.

Third, take a deep breath and do your homework. Finding a loan for your small business is not a process that will only take minutes. Here are three important steps to take before you submit your next application:

Find out why you were turned down by your bank. According to a recent study, nearly one in every four business owners turned down for a loan don’t know why they were rejected. Most lenders will be more than willing to tell you the reasons your application was declined and knowing that information can help you make the type of adjustments that will increase the likelihood of approval on your next application.

WATCH: Ariell Johnson, owner of Amalgam Comics and Coffeehouse in Philadelphia, discusses how she dealt with getting rejected by a lender.

Find the right type of loan. Many people think of conventional banks for business loans, but there are many other types of financing available for small businesses. From crowdfunding to microloans, there are more financing options out there than you may think. Understanding all of your options from the start can save you a lot of time, energy, and money in the long run. At Venturize.org, we help small businesses with this step with our loan option calculator tool, located on our homepage. On the calculator, simply select the amount you want to borrow,  your credit score, how long you’ve been in business and how fast you need a loan and the calculator will display a list of the best options for your individual situation.  

Find the best lender for you. Once you’ve decided on a loan type, you should research and decide on potential lenders. It’s essential to understand all of the specifics, especially when you are dealing with a non-traditional lender. Compare the pros and cons of different types of lenders. Research which lenders tend to have the best Annualized Percentage Rates (APRs) and terms. Contact your local Small Business Administration office to find responsible lenders in your area. Protect yourself from deceptive online and by-mail lenders that promise fast cash but take advantage of borrowers with outrageous interest rates and hidden fees. Once you learn about your options and better understand the steps you need to take to finance your small business, you can apply for a loan and borrow confidently.