Why Was Your Business Loan Application Rejected? Six Reasons Why

1. Why Was Your Business Loan Applicaton Rejected? Six Reasons Why Being a business owner means you have to make some important decisions as to the leader of the company, including securing financing from time to time. It’s not uncommon to see a business loan application rejected. But why? Maybe you’re wondering why your application was denied. We have listed six of the most common reasons why your application may not have made the grade and what you need to do to improve your chances of moving forward. The first reason you may have had your business loan application rejected is because you have no credit history or poor credit history. Lenders rely on your credit report to provide valuable information about you, your spending habits and your repayment habits. No one wants to give a line of credit to someone who has a reputation for late or non-payment. Ensure you work on your company’s credit history. If you don’t have credit, get some and pay it back for a while before applying again. If you have bad credit, get your payments on track, keep up regular payments for a few months before applying again. Another reason could be that you don’t have collateral. It’s not uncommon for your business loan application to be declined because you didn’t have collateral to put down. Collateral will

2. usually be your premises or expensive machinery or equipment. This is used as surety against the loan and can be sold to repay the loan in the event you default. The third reason you may have found your business loan rejected is that you have a weak cash flow. These days you have to prove you have money in order to secure the credit you need. This is not an easy task as chances are you need the loan because you don’t have the money you need to run your business optimally. Ensure you have a good cash flow to easily manage your daily expenses before applying and signing on the dotted line. A further reason that many loan applications get rejected is because the applicant wasn’t prepared. Being prepared for your application appointment can ensure you get the approval you need within the shortest period of time. Ask the bank manager what documentation you need to supply at the appointment, this reduces the risk of the process being delayed or rejected. Ensure the application is completed in full and that you provide all supporting documentation. The fifth reason why your business loan application may have been rejected is that you only want to borrow a small amount. Business loans are not for small amounts. You will find that there is a minimum loan amount that needs to be applied for in order to secure your loan. Speak to the bank manager and identify what their minimum allowance is, so you can apply with confidence. The final reason your loan application may not have been approved is that you are a new business. Banks and other lenders want to work with companies that have been operating for some time. This can be rather worrying for the small business owner who needs a loan for their start-up. The good news for new business owners is that there are other alternatives worth considering, such as the SBA (Small Business Administration) loans. SBA loans are for small businesses and are backed by the government. These loans can be used to start up a new business, expand an existing business, purchase equipment and much more. About Us:CalPrivate Bank, formerly San Diego Private Bank, is a leading private bank, serving clients throughout Southern California in the United States. This very well-established bank services high net worth individuals and businesses of all sizes. CalPrivate Bank’s focus is to provide a Distinctly Different Banking Experience through unparalleled service and creative funding solutions for individuals and businesses with complex financial needs. They offer a wide array of financial services, including checking, savings, time deposit accounts, treasury management and related tools. To find out more, visit www.calprivate.bank