Denied Business Credit?
What to Do If Your Business Loan Application Is Denied
Recent reports show that nearly one-third of business loan applications are denied. If you find yourself in this group, don’t panic—there are ways to improve your chances for approval. The key is identifying where the problem lies.
Common Reasons for Denial & How to Fix Them
Business Profits
- Does your business have a healthy profit margin?
- Reducing operational waste and unnecessary spending can improve profitability and make your business more appealing to lenders.
Assets & Liabilities
- If your balance sheet is unbalanced or your business is burdened with too much debt, lenders may see it as a risk.
- Work on lowering debt and improving financial stability before reapplying.
Payment History & Business Credit
- Lenders assess your business credit score and payment history before approving funding.
- If you’ve been denied, check your business credit report for inaccuracies or late payments.
- Most negative payment history only remains for 2–3 years, so focus on building positive payment habits moving forward.
Bank Ratings
- If your business bank account balances are consistently low, you may not qualify for certain types of funding.
- Aim to maintain a minimum balance of $10,000 or more to improve your standing with lenders.
Taking the Next Steps
A loan denial doesn’t mean your business isn’t fundable—it just means something needs improvement. Review your credit report, analyze your finances, and make strategic adjustments. If your business lacks credit history, take proactive steps to build a strong financial and credit profile to increase your chances of approval in the future.
