Not enough deposits: Merchant Cash Advance Declined.
Your business has been declined for a Merchant Cash Advance or ACH bank loan. There are several things that your business can do to get an MCA merchant cash advance. It may
have to take some time to correct or change things that caused the decline.
Many business have one or more MCA Merchant Cash Advances and ACH loans to finance their businesses. There are many reasons businesses are declined for these merchant cash advances when they apply. The dollar amount of the monthly deposits, the number of monthly deposits and NSF and overdrafts may be too high. Click on one of the links below to try to get approved for a Merchant Cash Advance.
ONLINE APP. Add Email and name to access App. Attach the last 3 months bank statements, or send App only.
Or tap TEXT US, and Text contact info.
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We can work with businesses to get past decline reasons, get approved and get financing.
How to get a business loan with missed MCA payments:
Steps and tips on how to get a business loan after missing mca payments.
Tools needed: internet connection, computer, phone. Supplies needed: Time available
1. Evaluate your missed payments.
The number of payments missed is important. Missing 1, 2 or 3 payments is considered minor and should not prevent your from being approved for more funding.
Missing more than 3 daily advance payments may trigger denials with other lenders. Consecutive missed payments make the prospects harder. Bringing your payments current is the best first step to get new funding.
Communicate with the lender during the process. Regardless of the outcome, it almost always causes the lender not to take more adverse action against you when behind. It will also make new funding much easier.
2. Match funding options
Tip: Begin a search for other funding options. Start the search broadly with other programs that your business may qualify for. Decide which programs are the best fit for your business.
Look at the qualifying requirements for other programs. Eliminate those programs that your business likely could not qualify for. Prioritize and choose programs you can get approved for instead of programs you prefer.
Apply for the best matching program that allows for recent missed payments on other financing. Talk to a representative before applying when possible.
Tip: Give them information on your overall profile and discuss your chances. If it is still a good fit, then apply.
4. Close approval
Review terms and conditions of any approval offer. Close the transaction if your business can handle the payments and the funding will assist in generating future revenue.
5. Make a plan after denial.
If the request remains a denial, then make a plan. Understand the decline reasons. There may still be a chance to reverse the decision and get an approval. Try this first. Consider applying with other lenders when you cannot get approved.
Apply with other lenders. If that still does not work, do not stop the process.
Begin working on correcting the reasons that were used for denial during the first funding request. Whether it is credit, financials, or cash flow, try to improve this month over month until your profile meets the requirements of the previous lenders.
FAQ: How to get a business loan with missed mca payments:
Can I get a business loan with missed mca payments?
Yes, you can get a business loan with missed mca payments. Review the decline reasons with the lender to see if the decline can be reversed. You can apply with other lenders that work with recent missed payments. Finally, you can work on correcting the denial reasons to get funding.
Can I get another cash advance after missing payments?
It is possible to get another advance. Approval depends in part on how many payments you missed, when you missed them and if they are still past due. Getting the payments current is the most important step. Staying in frequent communication with the lender will help your chances as well.
Do missed cash advance payments show on my credit?
Missed cash advance payments do not show up on personal credit if you have not defaulted. Default accounts may show up on personal or business credit. Check your contract. It may provide information on how and when the lender reports delinquencies.
Being declined for missed mca payments is something that can be overcome. Your business does not have to wait several months to get funding.
With an action plan of trying to reverse the decline decision into an approval, applying with other lenders and correcting decline reasons over time, your business should be able to get comparable funding quickly.
FAQ Frequently asked questions on getting a business loan with low recent sales
What are slow sales considered?
When sales are less than normal for a specific time period. Lenders consider any reduction of sales of more than 25% to be a significant reduction.
How do lenders look at a major decline in sales?
Lenders want to know why were sales low and for how long. They also want to know when sales are expected to rise again and how much. Lenders also look at the percentage drop in sales. If the business can survive, pay all expenses and make a profit are then evaluated in the loan decision.
How can I get a business loan when we are operating at 50% capacity?
There are several other types of financing a business may still be able to get now even with a big drop in sales. Asset based financing is the most likely, including using receivables, equipment or real estate.
My business tax returns last year were good. Why did the lender still decline us for the recent drop in business sales?
The lender is looking closest at the condition of your business right now and in the future. Lenders see a recent big downturn without knowing when sales will go back to normal as very high risk.
Many businesses have had low or no sales in the last few months because of the Covid-19 lockdown. Their many challenges include not being able to get financing.
Save your time. Don’t spend weeks racking up hours and inquires applying with lenders and programs that are almost certain to decline your business. Apply with programs that will lend even with much less demand during the virus. Get funded now. Apply above.
What are examples of declines in demand?:
March, April & May were much slower sales because of covid-19.
The most recent (3) months sales are looked at. The total deposits per month are reviewed to determine trends. Questions by the lenders include:
Is there a downturn? If so, how much? What were the customer’s average daily balances? Were they overdrawn with NSF’s and overdrafts?
50% or 60% reduction in sales
Lenders look at how much of a reduction in business your business has had. How steep of a reduction, how quickly, how long and has the business started to recover? The main thing lenders will look at is the percentage sales drop. Any drop in sales over 25% is considered significant. Funding may still be possible with drops of 50% to 75%. If a business has had a major drop in sales and needs a larger business loan, then they can add real estate to back the funding and get a much higher loan loan.
Some segments of your business were strong while others had very low sales.
Example: A retail store’s overall sales in March, April & May were down 50%. In store customers dropped to almost 0 because of the lockdown. However, because their website offers shipping and delivery of products, online sales were up 75%.
How to get a small business loan in spite low recent sales?
– Make your case. Don’t just say business was bad. Say more. Example: Explain why. You can say “We had a drop in business and purchases because of the virus. In spite of that, we are now open and sales are increasing”.
In the example above, provide the information when applying. Explain how it was not the fault of your business, and you still had sales that are now increasing, both positive current trends. This shows that your business overcame obstacles and is rebounding.
Have all the following questions already answered about the slowdown in business and provide them when you apply.
How bad has it been?
What is the situation now?
How has it affected your business?
What are you doing about it?
When do you expect sales in rebound and increase?
How can you show the business will survive?
Business funding does not have to be hard to get. Does your business have collateral or cash flow? If so, there is a program that will fund your business. Requests for higher amounts are much more likely to be declined for the applicant not having enough collateral. Denied for not enough collateral? See Tips, FAQ questions and answers below.
Frequently asked questions FAQ declined for a business loan for insufficient collateral.
What does insufficient collateral mean?
You or your business did not have the assets that lender wanted to approve a loan. We specialize in funding business loans against collateral large and small using many asset types and with the toughest credit a borrower can have.
What can be used as collateral for a secured loan?
We can use equipment, vehicles, semi-trucks, trailers, and real estate for hassle free and quick funding.
What if I don’t have collateral?
A cash flow or unsecured loan can be approved. Pre-qualify immediately and get an approval and funding within hours in many cases.
Why do some loan companies want collateral?
To approve a business loan instead of declining it. The lender can sell the collateral if a borrower defaults and recover what is owed to them. This lets them make more and higher offers.
Your business can get money in two days. Provide the most recent (3) months business checking account statements with the one page application above, and you can be on your way to funding within 2 business days.
1 Year time in business Program.
Get a large business loan in you have been in business for more than 1 year. Many businesses get up to 75% of their total monthly deposits.
Low credit score program
Were you turned down for having a very low credit score? Apply for the low credit score approval program
FAQ Frequently asked questions on being declined for time in business
What is time in business?
Time in business starts from the day the business is registered with the secretary of state, city, or county. It is generally not the time when operations begin and the business has income. Some lenders will look at when the business began showing revenue as part of their review.
Can we get approved with a few months in business?
Cash flow programs for as little as 3 months in business are available. Certain asset based programs can be approved with only 1 month in business.
Can we get a loan as a brand new business?
There are multiple programs available for businesses that just started. Even businesses that have been registered for only a few weeks have an opportunity to be approved.
Why do lenders decline for time in business?
Lenders have statistics that prove after a business has been operating more than a certain number of years, their chances of staying in business are higher. Businesses open more than 3 years stay in business for a significantly longer time.
Our programs can get you approved today with only 3 months time in business. Don’t let time in business stop you from getting funding fast.
One of the reasons companies are declined for business loans is for too many overdrafts and NSFs. They have excessive Overdrafts and NSF’s per month and that exceed lender guidelines. What are non sufficient funds and overdrafts? A overdraft or insufficient funds is a negative balance in a bank account caused by drawing more money than the account holds in part because of low deposit volume.
How can your business overcome being declined for a business loan or Merchant Cash Advance for having excessive Overdrafts or excessive NSFs? Here are several tips that your business can follow to get a business loan.
You will get you the best program for your business. Apply below today.
We assist businesses in overcoming these obstacles so they can focus on making their business prosper.
Many times a business loan that is approved falls through at the last minute and does not close if there are overdrafts and NSF’s before closing. If there are too many overdrafts and NSF’s since the beginning of the Month, or between the time of approval and closing, it may be declined just before closing. When a Bank verification is done and the Account is overdrawn, the loan may then not close and be declined.
At the time you are trying to close a loan with an overdrawn business account, make a deposit immediately before the Lender checks the bank account. If you make a deposit beforehand, you can save the approval. If it is too late and the loan is declined, ask the Lender if you can make a deposit to bring the account into the positive will they close the Loan then? Do not try to close a loan if your account is overdrawn. Wait until it is in the positive.
FAQ Too many overdrafts and nsfs
Can we get a business loan with nsfs and overdrafts?
Approvals are issued everyday to businesses with nsfs and overdrafts in their checking account. Having enough cash flow to pay the debt and only having overdrafts occasionally helps. Provide a good explanation for why the account was overdrawn when applying.
How hard will overdrafts and nfs make it to get a business loan?
Overdrafts and nfs do not always keep your business from getting approved. You may get approved for a lower amount with higher rates and shorter terms. Overdrafts in your business checking account in the last 30 days are more important, and the last 90 days are usually looked at. Rules on the maximum vary from lender to lender.
How many overdrafts and nsfs can we have?
Most business loans limit overdrafts and insufficient fund items to about 5 per month. Ask specifically for any business financing you may apply for. Some programs will not allow more than 3 recent overdrafts in the last 30 days.
Why were we declined for paid nsfs?
The lender probably declined because they felt the cash flow and average balances were not strong enough. Even when insufficient fund items are paid, they still happened and the lender may believe any new debt will be too much.
How to get approved with excessive Overdrafts or NSF’s
Talk to lenders in advance and find out if the lender has a maximum number of Overdrafts or NSF’s per month they accept. We can put your business into qualifying programs so your business can get all the Capital it needs.
Other options if declined
Too many Overdrafts or NSF’s for an MCA merchant cash advance or ACH bank loan.
Talk to the Merchant Cash Advance companies and ACH business loan lenders directly about being declined for having too many Overdrafts or NSF’s per month. Ask them if there are other programs available you may qualify for right now. Always ask if you can start out for a lower amount.
In addition, make sure your business does not have any more Overdrafts or NSF’s for a few weeks and apply at the start of the next statement month.
If you know you will not have any more Overdrafts or NSF’s the next few weeks in your business checking account, tell the Merchant Cash Advance company or ACH business loan company. If the overdrafts or NSF’s were from a single event instead of spread out throughout the months, this can make a difference. It is an isolated incident. Let the lender know they resulted from a one time event. Many decisions are automated and made quickly. Make a strong case and the lender may reconsider your request.
If the lender will still not approve it, ask how long you have to wait before your can be reconsidered. Ask what needs to be corrected to avoid being declined again.
Get other working capital loans
Your business can apply for other types of business loans if time is critical. Which ones are best depend on your company’s financing needs and situation. Choices include:
Also consider business loans based on Real Estate, Equipment Assets
that are free and clear, and Account Receivables. Monthly Term loans up to 60 months or longer with full financials.
Your business can overcome being declined for a MCA Merchant Cash Advance or ACH business loan for having too many Overdrafts and NSF’s. The SBA small business administration offers advice and workshops on business loans.
How to get approved for a cash advance with less than 5 deposits per month.
Contact us and we will put your business into the approval program that can accept less than 5 deposits per month. Only have 1 or 2 deposits per month? We have programs waiting for your business now that can you approved fast. Contact us above!
FAQ on being declined for a business loan for not having enough deposits
How many deposits does our business have to make each month to qualify?
5 deposits or more per month are usually required for a merchant cash advance. Some advance companies require as many as 10 or more. They must be real business revenue from customer sales.
Can our business qualify with only 2 or 3 deposits per month?
Some lenders consider a low number of credits per month into a business account as higher risk because the business has fewer customers that it makes money from. Losing one customer will cut revenues and their ability to repay a loan much more than a business with many customers.
Why were we declined for not enough business deposits when we had more than 5 per month?
Deposits that are not from the sales of the business may not have qualified as revenue. Examples are transfers from other accounts, loan proceeds, very small deposits compared to others, and rebates.
Businesses have used cash flow loans to a great extent in recent years to finance their businesses. The business account has low recent sales in one of the most recent months.
Make more deposits immediately during the rest of the month and apply at the start of the next month. A deposit to a business checking account statement is often from several customers. Retailers usually have several checks and cash from several customers, go to the bank and make 1 deposit. Instead of 1 large deposit, break the deposit into several smaller deposits over the course of 2 or 3 days.
Talk to the Merchant Cash Advance companies and ACH business loan lenders directly about being declined and ask them how you can get your business approved. As your business grows, it will add more customers. Having deposits from more customers will increase the number of deposits per month into your business account. As a result, this will make your business a better risk from the lender’s point of view. The number of customers a business has is an important part of looking at risk by lenders.
For example, restaurants have hundreds of customers per week. As a result, they will show many deposits per month. Restaurants that lose a few customers only lose a small percent of their customer base. A business that has 4 large customers loses 25% of their customer base when they lose just 1 of their customers.
If you know the deposits you make into your business checking account have multiple items, you can tell the Merchant Cash Advance company or ACH business loan company.
What are multiple items?
Multiple items means that the funds in the deposit are from more than 1 customer. If the merchant cash advance company knows this, you can get a copy of the deposit from the bank. The copy of the deposit will show the items deposited. If it is 5 items, you may get credit for 5 deposits instead of 1. You may be able to get the MCA company to change the decline to an approval. A number of ACH lenders and merchant cash advance companies are open to this.
If this does not work, ask how long you have to wait before they will consider you again. Be clear on what they want to see the next time so you will not be declined again.
Get working capital through other loans
If the options above do not work or you cannot wait, your business can consider other types of business loans. Which ones are best depend mostly on your company’s profile. Choices include:
– Monthly Term loans up to 48 months based on Tax Returns
– Accounts Receivables Financing
– Business loans based based on Real Estate or Equipment Assets.
Business loans based on real estate, equipment or accounts receivables will usually not have this requirement. Having collateral that covers the loan amount means that cash flow is not as critical. The number of customers is also not important.
Unsecured loans depend heavily on cash flow and as a result, the cash flow of the business is scrutinized much more. Businesses applying for unsecured loans should also have financial statements that show the business making money and having net income. Many businesses do not show net income and this hurts their request and also causes declines.
The SBA small business administration also has excellent resources on alternative business loans
Don’t let your business get turned down for any of these top 6 business loan decline reasons.
1. Derogatory Personal Credit
Poor, damaged, or delinquent personal credit of the owner is the main reason for being turned down for a business loan. Most businesses are less than 35 employees and the personal credit of the owner is usually part of the credit review. If the personal credit score of the owner is low, there are some steps that might be taken to minimize the impact to avoid defaults and the bank calling the loan due and payable in full.
Short term Solutions:
Research different business loan products before applying. Try to apply for business loan products that have less scrutiny of the owner’s personal credit. Talk to the lender first and find out how much of an impact personal credit has on their business loan product.
If there are multiple owners of a business and one owner has better credit, the owner with the better credit should be the first applicant. If the owner with the better credit is over 50% owner, the application may be approved without the other owner. This may prevent a decline for weak credit.
1. Longer term solutions:
Get a copy of your personal credit report and look for errors. You can dispute them with the credit bureau and your credit score will go up. Any derogatory items close to 7 years old may be on the verge of dropping off your report. If you have limited credit, this may be a time to consider what new accounts you can add to your credit bureau to make it stronger.
2. Derogatory Business Credit
Businesses can have derogatory business credit. This derogatory business credit may appear on a business credit report. Examples are State Tax liens, Federal Tax Liens, Suits and Judgements, Past Due Accounts and Collections.
Get a copy of your business credit report through Dun & Bradstreet and before applying for a business loan. Contact the business credit agencies and dispute incorrect information. The credit agencies will remove information they cannot verify as correct.
3. Insufficient Cash Flow
The lender believes that the business does not have enough recent cash flow to handle the new debt. A Profit and Loss statement showing a negative net income may cause a decline. Overdrafts and NSF’s happen because of poor or insufficient cash flow.
How to avoid this denial reason:
If your business is declined for this reason, contact the lender to discuss it. There may be alternative solutions. Your business might be approved for a lower amount. This can include a starter line that lenders offer just to get the relationship started. Lenders sometimes do this with borderline decline instances. They want to take a small risk hoping that the borrower will develop into a good long term customer. Weak financial statements.
Financial statements are still required for many types of business loans. If a companies financial statements are weak and show a low net income, decreasing revenues, or other weaknesses, it can easily cause a decline.
How to avoid this decline reason:
4. Insufficient Collateral
Some loan products are asset based but the collateral must be satisfactory or the business loan will be declined. This decline reason happens often when a bigger business loan is needed. Lenders will just not issue many unsecured approvals for higher amounts. Real estate backed loans, accounts receivables financing and equipment loans require acceptable collateral. Even if the customer has excellent credit and time in business, if the assets do not have enough value or other conditions are not here, they may be declined.
5. Time in Business
The time in business requirement varies from one business loan to another and as much as 2 years or more may be required. Ask the lender if there is a time in business requirement. If there is, ask if it a hard and fast rule. For some lenders, if the applicant has other strengths in their profile, it may override the time in business requirement and be approved. Less than 6 months time in business is difficult to approve. Brand new businesses with less than 3 months sales have very limited, if any, options.
Some lenders will decline a business just for being in a certain industry. Often business still apply because they don’t know the lender won’t loan to their industry. This is an easy decline to avoid. Put this in the list of questions to ask a lender before applying. For example, do you lend to my type of business? Sometimes lenders have preferred industries that they lend to.
FAQ Frequently asked Questions on top 6 business loan decline reasons
What are the main reasons businesses get declined for loans?
The top reasons businesses get rejected for loans are bad personal credit, net income or sales are too low, not enough collateral, short time in business, industry type, and unacceptable business tax returns or financial statements.
What can our business do after being declined for a loan?
Ask what the main decline reasons were. If it was for credit, ask for any credit bureau and business credit scores the lender has and the scores the lender wanted. For cash flow, collateral or financial information declines, find out the minimum requirements and when you can re-apply.
What can we do after being denied for low cash flow with strong sales?
The lender calculated that based on their criteria, your business does not have enough cash flow after expenses to safely pay their new debt. If your business is about to payoff any current debt or has recent increasing sales, then let the lender know. They may reverse their decision or approve a lower amount.
Some lenders have industries that the do not considered favored industries. They may consider your industry as challenged or place it in a more difficult to loan to internal category. Ask the lender: Is my industry a preferred industry you lend to?
How to correct the business loan decline
Not all of these 6 top business loan decline reasons have to be corrected. Some cannot be corrected. The steps that should be taken are on a case by case basis. Every company has different hurdles to being approved for a business loan.
Using some of the tips above and your business can overcome many of these top 6 business loan decline reasons and get critical business capital.
In summary, the top 6 business loan decline reasons are:
Derogatory personal credit
Derogatory business credit
Insufficient cash flow
Time in Business
In addition to charge offs, missed payments are considered derogatory business credit. The SBA is another resource available to assist small businesses in all industries prepare for business success. .
Should you worry about all your decline reasons? What are other steps you can take? There are other considerations besides these top 6 business loan decline reasons. For example, declines for key financial ratios such as debt to income and also declining revenues.
as a result, businesses may get loan terms they don’t want and should consider Additional action steps in addition to the top 6 business loan decline reasons.
We specialize in loans to types of businesses many lenders call restricted. They prohibit, and worst, just do not want to lend to them. Put your business with a loan company that values you and your business!
Get approved today for your type of business.
Fast and easy programs for all business types. The highest approvals with best terms available. See if other lenders consider my business HIGH RISK ?
FAQ Frequently asked questions on restricted industry business loans
How do I know if my business is considered restricted by lenders or not?
Ask the lender before applying if they have programs available for your industry. Sometimes they do not want to say they won’t loan to your industry. Our loan programs lend to all industries.
What does restricted industry mean for a business loan?
A business is in an industry the lender does not lend to or has much stricter rules for approval. They don’t lend to it because they see it as a higher risk for delinquency, defaults and losses. Other times the lender does not have expertise in that field.
What do challenged and prohibited industries mean?
These are industries lenders will scrutinize more and require a longer time in business, higher credit scores and revenues. Used car lots, construction and trucking are examples. Ask the lender if they have any limitations on lending to your business type.
Is my new business considered restricted by loan companies?
Many loan companies do not loan to new businesses. Check with the loan company before applying if new businesses have restrictions or are prohibited. Our programs loan to businesses 3 months and longer.
How to get a restricted industry business loan:
Use the list provided to determine if your business type may be considered a restricted industry.
Identify lenders that will lend to your industry. Contact those lenders and ask for their qualifying criteria. Select the best match based on your company’s needs and their approval criteria.
If approved, request and review closing stipulations and documents. Submit all required closing documentation. Complete merchant call if required.
Receive funds into your business checking account.
Restricted industries or elevated scrutiny businesses – examples:
Many industries are restricted by lenders. For example, restricted industries include:
Accountants, Accounting firms, Accounts Receivables Factoring Companies.
Adult Entertainment, Escort Services, Gentleman’s Club, and adult industries.
Airport companies and Airport related companies, Airlines, and Regional Airline Companies. Attorneys
ATV Dealers, ATV Sellers and RV Dealers.
Auto and Home Supply Stores.
New Auto Dealerships and used car lots and dealerships.
Cemeteries and Funeral Homes.
Consignment Stores, Child Day Care Services and Churches.
Collection Agencies, Check Cashing Companies, Bail Bond companies, Credit Reporting Services, Credit Protection Services Businesses, Credit Card Protection and Credit Restoration / Repair Businesses and Consulting Businesses.
Collection Agencies, currency exchanges, and Wire Transfer Businesses.
Dating Services and Escort Services.
Debt Consolidation Companies
More restricted industry business loan type companies
Direct Mail Companies.
E-businesses and E-Commerce businesses.
Educational Services, Colleges and Schools.
Factoring Companies, Financial Institutions, Financial Transactions Firearms sales, weapon sales
Financial services and lending
Financial Transaction Processing, Financial Advisors and Freight Forwarding Forwarders.
Fitness and Recreational Facilities.
Fraternities and Sororities.
Gambling and Gaming Establishments.
Holding Companies, Insurance Agencies, and Investments.
Home Building, Home Construction, Housing Related Industries, and Home Home based business, other home based businesses.
Horoscope and Fortune Telling.
Import and Export Companies.
Income Tax Preparatory Services, and Income Tax Return Services.
Insurance Agents and insurance brokers.
Insurance companies, Insurance Agencies, and Investment Opportunities.
Lotteries, Raffles, Gaming and Gambling.
Further restricted industry business loan type companies
Lawyer and lawyers. Attorney and Attorneys. Legal practice and Legal Practices.
Mining Companies and Quarrying.
Magazine Subscriptions, Mail Order Coin Sales, Mobile Home Dealers, Mobile Phone Dealers, Wireless Stores and Cellular Stores,
Mortgage Lenders and Mortgage Reduction Services.
Motorcycle and Scooter Dealerships and Motor Home and Camper Dealerships.
Non Profit Companies, Not for Profit Companies and Not for Profit Grant Writers.
Non Bank Cash Advance Companies.
Oil Pipelines companies and Oil and Gas field companies
Online Stores, Online Retail Stores, Online Merchants, and Online sales.
Payroll Companies, Pawn Shops, Thrift Stores and Consignment Stores.
Personal Trainers. Precious Metal Sales and Coin Sales.
Printing and Printers.
Real Estate companies, Real Estate Management Companies, Real Estate Investments, and Real Estate Brokers.
Recreational Vehicle Sales
Restricted industry types continued
Sports Events Advice, Sports Instruction and Recreation Instruction.
State Agencies and Government Agencies.
Taxi services and Tax Preparation Services
Ticket Brokers, Time Share Investments and Tour Guides.
Travel Agencies, Discount Travel Clubs, Travel Related Companies and Travel Subscriptions.
Tobacco and Electronic Cigarettes, Firearms and Gun Stores.
Trucking Companies, Transportation companies, Logistics Companies and Sea Transportation companies. Used Car dealers, Auto Dealers, new car dealers and Truck Dealers.
Used Furniture Stores and Furniture Retailers.
Vehicle Inspection Companies.
Virtual Auction Houses.
Wireless phone and accessories.
Elevated Scrutiny Industries
Other Industries are reviewed with “elevated scrutiny”.
Home health care companies. Private home care companies.
Web development, Credit and debt counseling. Financial advisors and consultants.
Elevated Scrutiny industries often include:
Annual Membership Clubs and Appraisal Services.
Auction Houses and Auction Businesses.
Benefit Package Companies.
Boat Sales, Business Opportunity Companies.
Buyers Club and Coupon Book Companies .
Detective services and Private Investigator Services or companies.
Diet companies or Diet program companies.
Donation Companies. Door to Door Sales companies.
More elevated scrutiny industries
Financial Aid Services Companies.
Flooring companies, Tile Companies, Blinds Companies, Window Companies.
Formal wear companies.
Fortune Teller Companies, Psychics, Astrologers and Spiritual advisors.
Furniture Stores, Home Based Businesses, Homeopathic Remedies and drugs insurance.
Modeling Agencies and Beauty Pageant Organizations.
– Mortgage Lender or Mortgage lenders
Multilevel Marketing and Pyramid Sales.
Online Electronic, High Ticket Electronics, Prepaid Phone Card Companies, Prepaid Phone Card Seminar Companies, Sports Memorabilia Companies, Telemarketing Companies, Ticket Agencies, Time Share Companies and Web Design and Web Hosting Companies.
– Construction companies are Restricted Industry or Elevated Scrutiny.
– Trucking companies
– Utility companies
– Seasonal business
Challenged industries are similar elevated scrutiny industries. Underwriting will consider them, but under a tougher review and approval process because of the industry they are in.
Lenders often either have restrictions or elevated scrutiny of companies
that work in construction type work. These companies are either declined
or lower amounts with shorter terms are approved.
Insurance companies are hard to get business funding for.
Travel agencies and convenience stores that sell gasoline often have to payout most of the commissions they get. As a result, most of the revenue they show coming into their account is not business revenue. Only a small part of it is. Another example is a travel agency which may keep a small percentage of what they receive and payout the rest. Insurance companies also receive commissions for life insurance the sold but then the have to pay the insurance broker that sold that policy.
Lenders have to make a decision and approval amount based on their real income, or net income.
These businesses have difficulty getting funding:
What is a Seasonal Business? Definition of a Seasonal Business:
A Seasonal Business is a Business that has it’s Peak Sales and Operations during part of the year. The remainder of the Year they are either slow or closed.
Examples of Seasonal Businesses include:
Accountants and Tax Preparation Services.
Bridal Wear businesses, Catering Halls, Floral Businesses,
Moving Companies, Taxi and Limousine Services, Jewelry, Shipping Businesses, Golf Courses and Ski Resorts. Other seasonal businesses are nurseries, ice cream shops and amusement parks.
Example: Customer Case
Santa Fe, NM. Pueblorides, a used car dealer in the Santa Fe area completed a $45,000 working capital line. The company is a small used car dealer in the Pueblo, NM area. Used Car sales are a restricted industry. We were able to assist them using a small number of business lines available to fund this industry. They were turned down by several banks and other lenders. With this funding, they were able to increase the number of vehicles on their lot.
Callers tell us they have been denied for restricted industry or in a restricted industry.
Getting a business loan in a restricted industry
Businesses that have been denied by a lender for being in a restricted industry will have to get a business loan another way. Ask lenders upfront if they will loan to businesses in your industry. Find out if they put businesses into other funding categories. If so, what are they? These categories sometimes include the following:
If the lender has these categories, they will not tell you. Ask if they have preferred industries. Ask if they have restricted industries they do not lend to. Finally ask if they have industries they label as hard to lend to. Asking these questions will help you get a restricted industry business loan. They may avoid unnecessary declines.
Thank you for visiting our restricted industry business loan resource page.
Are you asking yourself why the bank declined my business loan?
Where can you be approved? Helpful tips to turn a decline into an approval and find other business loans. Match your business to small business loans that you will get approved for !
What caused my business to be declined? What are the most common decline reasons?
Common reasons are: Bad credit Delinquent or missed payments
insufficient cash flow If you have been turned down for any decline reason, contact us. We specialize in difficult to approve businesses and business loans and have programs that can approve your business for any decline reason.
If you think the bank declined my business loan for wrong reasons, then the first step is to call up the company that turned you down. Determine if you are speaking with someone that has the knowledge and experience to provide you with useful information about the decline. If you received a letter, call and confirm the decline reasons. For more information on strategic reasons, read why banks don’t lend to small business. Complete the Secure DocuSign 30 Second Application now.
Or call us at Tel: 1-919-771-4177, or Question?
FAQ Frequently asked questions on why the bank declined my business loan
Why don’t banks lend to small businesses?
A high percent of small businesses fail in the first 5 years, so they are considered a higher risk than larger businesses. A small business has to have excellent personal and business credit, strong collateral and financial statements to get approved at a bank. In most cases only certain collateral is accepted that can be easily liquidated with a value between 200% and 1000% of the amount of the loan. Financial statements must show steady or increasing gross profit and net income.
Are there alternatives to banks for business loans?
You can successfully get a business loan by understanding the different alternatives available in the marketplace. Then understand what it takes to get approved and the reasons you may be declined. Understand the strengths and weaknesses of your business and apply for the best matching program.
What can I do after the bank declines my business loan?
Ask a loan officer to discuss all of the decline reasons. Also ask how you can correct those to get an approval and if there were any other concerns. Get information as specific as possible and consider alternative business loans while you are working on the bank’s decline reasons.
Want more info on why the bank declined my business loan?
Missed daily payments
You have an existing daily or weekly Merchant Cash Advance and you have missed payments on the advance. Missing daily payments is a major reason why a new loan request may be denied. Missed daily loan payments may can a renewal request to be denied.
Average Daily Balances too low
This decline reason means that your daily ending balances were too low over the month. Lenders have different balances that they want
and often will not tell you. Many lenders often want at least $1,000 Average Daily Balance.
Inconsistent Cash Flow
Business cash flow has fluctuated too much from month to month. In some months the cash flow meets the minimum required by the program and in other months it does not.
Declining Cash Flow
Total monthly deposits into the account have been declining month to month from recent low sales. Even if the average still meets criteria, the lender may still feel this is a reason for the turndown.
Does not meet criteria
This is a general decline reason. the lender does not want to tell you what this means
Month to Date MTD
This a decline reason that often happens with Merchant Cash Advances. The Month to Date activity is requested for the current month and the approval be declined or reduced when current months deposits are lower than the previous three months.
Ask if significantly lowering the amount of the request, adding a strong co-signer, or adding more collateral would cause them to reconsider and possibly approve the application. Speak directly with the credit department that makes the credit decision.
If any of the reasons you are declined for a business loan involve credit, you will want to contact at least one of the credit reporting agencies to determine what is on your credit file. You may already know most of what is on your file, though you should get a copy of your file to confirm it. If there are any inaccuracies, you should dispute them with the bureau. This is easy to do and can improve your bureau without significant effort. You will succeed in getting derogatory information removed when the bureaus cannot prove the derogatory reporting is accurate.
Once you accept what is on your credit report, begin looking for other alternative loan options. First determine what are the strengths of your business and weaknesses of your business. When you contact companies, find out as much as you can about what their alternative loan options are based on. Instead of choosing the business loans you like best, organize the loan types in terms of what your business is most likely to qualify for. Of those loan options, then decide which ones you believe you should proceed on.
Other Loan Options
Discuss the loan options with the representative and speak with someone who is knowledgeable, rather than someone reading from a script. If they don’t give you logical answers to your thoughts or concerns, try to speak with someone else. Don’t feel that you must get all the funds you need through 1 type of loan, or all of it immediately at that time. There may be 2 loan types that you should proceed on.
If your business needs $100,000 in total, and you only qualify for $50,000, this may still work by getting the funding in segments over time. You can take the $50,000 you qualified for and also work on getting the rest of the funding required over the course of the next few weeks or months. Chances are you did not need the entire $100,000 immediately. Most businesses that receive $100,000 do not spend it all within the first 30 days. These steps are important when your business has been declined.
For additional resources to help you prepare for future business loan requests, you can
also visit the SBA. The SBA government site has numerous resources which can assist your business.
Thank you for visiting our resource page on what to do if you are declined for a business loan.