Have you ever been turned away from a mainstream bank or finance company? Not to worry, this is definitely not unheard of, especially for those who have applied through high street banks. There are usually other options as well as ways to overcome business loan rejection, which I will be going into further detail in this blog.
What to do if you have been denied by your chosen finance facility
A good business doesn’t fall at the first hurdle. There are things you can do to proactively overcome the obstacle of business loan rejection.
Ask for feedback from the finance company
Look into why you were rejected by the finance facility. Don’t let things end with the rejection letter or email. Get in touch with your account manager and gather some constructive feedback on what you can do better to get accepted elsewhere or to reapply.
It is key to note that the approach to this is important. So, don’t be argumentative or hostile over the rejection. Instead respect their decision, and take this as an opportunity to learn and better your business. Not to mention, that by taking a calm but curious approach you are more likely to get more out of the conversation.
Some good questions to ask would be:
- What would have made a difference to getting accepted?
- Is it collateral or financially related?
- What credit reporting agency did you use to evaluate our business?
- Can I reapply at a later date? If so, what would we need to change to get accepted next time?
Consider why you have been rejected
Detecting the problem is the first step. Businesses are commonly rejected for the following reasons, so expect it to be one of these:
- Poor credit
- Too much debt
- Scarce credit history
- Bad cash flow
- Lacking collateral
- Unfinished financials
Once you have identified the issue at hand you can then look at fixing it. It goes without saying that some of the problems above are easier to solve than others on the list. For example, an incomplete financial report is much easier to fix than not having enough credit history. So, whether this be a sign to pay off some existing debt, reconsider particular overheads, or just reviewing your credit report, you can take steps towards growth from this experience. You will then hopefully have a better chance of getting approved next time.
Overheads getting the best of your business? Read our blog all about overhead management here.
If you have been turned down by a mainstream finance facility, why not give us a try? We offer a range of business loans. We also work alongside a myriad of funders; this is what makes up our 96% acceptance rate. So, if you get turned down by one funder, chances are we will be able to find another that is willing to fund your business visons. Give us a call today on 01494 611 456 or drop an email to [email protected] and a member of our friendly team will be more than happy to help.