Bank Declined My Business Loan – What Can I Do?

A decline from your bank feels personal, but it usually is not. Banks lend inside a narrow set of criteria driven by their own capital rules, and a large proportion of perfectly good businesses fall outside it. The specialist market exists to fund exactly those businesses.

Why banks decline

• Sector: hospitality, construction, haulage and property are routinely treated as higher risk by banks.
• Time trading: many banks want three years of filed accounts.
• Credit file: any adverse marker on the company or a director can trigger an automatic decline.
• Affordability model: banks stress-test conservatively and often ignore management accounts in favour of the last filed year.
• Purpose: banks are reluctant to fund refinancing, acquisitions or anything they consider unusual.

First, find out why

Ask the bank for the reason. You are entitled to it, and it tells us which route to take next. A decline for sector reasons points to a completely different set of lenders than a decline for affordability.

Routes that are still open

• Specialist unsecured lenders: assess on recent bank statements and management figures rather than last year's accounts, and decide in days.
• Asset finance: if the purpose was equipment or vehicles, an asset finance lender will look at the asset rather than the bank's criteria.
• Invoice finance: if cash flow is the problem, releasing money from your sales ledger may be a better fit than a loan anyway.
• Secured lending: property or asset security opens doors banks keep closed.
• Merchant cash advance: for card-taking businesses, approval is based on turnover, not credit history.

What not to do

Do not apply to several online lenders in a row. Each application can leave a hard search, and a cluster of them makes the next lender nervous. One well-placed application beats five scattered ones.

How DNA Finance turns a decline around

We see bank declines every week. We find out why, identify the lenders whose criteria the business actually meets, and present the case properly. Most businesses that come to us after a bank decline are funded. The conversation is free and has no impact on your credit file.