Declined for a small business loan for recent low sales?

Are recent low sales keeping your business from getting a loan?

For many businesses, the low March through June 2020 sales months are keeping are keeping businesses from getting approved for loans.

There is an approval fix!  Choose from several small business loans  your business can get with revenue drops as much as 75%!

Complete the secure application below.

Business Loan with low recent sales – Secure Docusign Or Call us at Tel:  1-919-771-4177

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.

Have your business sales been low in the last few months?

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.

Can we get business funding with no recent sales?

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”.

Tips and steps to explaining low recent sales to lenders to help get a business loan

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.
Why?
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?

If your business has started to recover in May, consider loan options now.





Declined for not enough Collateral? Take these Steps

Has your business been declined for not having enough collateral?

Then choose from a small business loan that has 5 very flexible no collateral options.      Click on the Docusign application below because fast as same day or next day funding is just a click away.

Complete the secure docusign application now.
Or call us at Tel:  1-919-771-4177, or Question?

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.  Denied for not enough collateral?  See Tips, FAQ questions and answers below.

The most flexible business loan collateral options of all programs. If it can be used as collateral for a business loan, it will be!

 

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.


Thank you for visiting our page on how to get approved for a business loan with not enough collateral.

Declined for time in business? Get approved here!

Has your business been declined for time in business?  We have several business loan options for businesses that have sales as little as 3 months and 2 months in some cases.

Multiple options including asset based programs.   Same day approvals and low credit scores approved.    Fast closing and large approvals available.  Apply below today.

Complete the Secure Docusign 30 Second Application Now
Or call us at Tel:  1-919-771-4177, or Question?

What are your options if you been declined for a business loan?

3 Month time in business program

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

We will help you get approved for time in business.

FAQ Frequently asked questions on being declined for time in business

Question: I was declined for my time in business being less than 6 months. Can you approve us with only 4 months in business?
Answer: Your 4 months in business can be approved. Our programs can approve with 3 months in business and even 2 months in some cases.
Question: We were told we only had 4 months in business but we registered the business months before we began operation. Can you use the time since we registered as our time in business instead of since we began making money?
Answer: We can get you approved using the time you registered the business, not the time your business stated making money. The time in business is how long your business has been listed with the secretary of state in your state.  Check here with your Secretary of State business listing to find  your time in business.
Question: How do you define time in business?
Time in business starts the day the business was registered with the secretary of state.   It is not the time when operations began or you stated making a profit.

In summary

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.

Too Many Overdrafts and NSFs: Business Loans

Too many Overdrafts and NSFs

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.

Complete the Secure DocuSign Fast Application Now.
Or Call us at Tel:  1-919-771-4177, or Get funding with too many overdrafts and NSF’s here. 

Business account overdrawn.

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.

Business Loans with Overdrafts and NSF’s

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.

Possible solution:

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.

Declined For Not Enough Deposits?

Has your business been declined for a loan for not making enough deposits into your checking account every month?

Get approved and choose one of several  small business loans for your business that do not require a lot of deposits per month.   Apply below and get approved today.

Complete the secure DocuSign 30 Second application.
Or call us at Tel:  1-919-771-4177

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.

Our Small Business Development Center assists in getting past these problems to help business owners get a fast and easy business loan.

Has your business been declined for not having enough deposits per month?

Other options

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.

Possible solution:

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

Top 6 business loan decline reasons

What are the 6 biggest business loan decline reasons used by lenders?

 

In this post we will review what loan companies decline for and what you can do about it.

Tips on easy things you can do to prevent many of these declines.   Use the following list to increase your chances of getting approved for a business loan by avoiding the decline reasons listed.

Turn your decline into a fast and easy approval below – today!

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Or call us at Tel:  1-919-771-4177, or Question? Contact us here.

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.

Solutions:
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.   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.

6.Industry.

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.

Has your business been declined for a business loan because of derogatory personal credit?
Apply now for fast and easy business loans with bad personal credit.
Has your business been declined for derogatory business credit? Several solutions fast.

 

Has your business been declined for insufficient cash flow? Click here for immediate solutions

In summary, the top 6 business loan decline reasons are:
  1. Derogatory personal credit
  2. Derogatory business credit
  3. Insufficient cash flow
  4. Collateral
  5. Time in Business
  6. Industry

The SBA is another resource available to assist small businesses in all industries prepare for a loan.   They offer a 30 minute video session on how to prepare a business loan package.

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.

Restricted industry business loans – Approved Here!!

What is a restricted industry?

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 ?

Apply below now to get funding today!

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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:

  1. Use the list provided to determine if your business type may be considered a restricted industry.
  2. 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.
  3. If approved, request and review closing stipulations and documents.  Submit all required closing documentation.   Complete merchant call if required.
  4. Receive funds into your business checking account.

Complete the secure DocuSign 30 Second application now.
Or call us at Tel:  1-919-771-4177, or Contact us

Do lenders consider my business high risk?

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.
Auction Houses.
Bitcoin Companies.
Bus Companies.
Construction companies
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.
Freight Brokers.
Gambling and Gaming Establishments.
Gas Stations.
Holding Companies, Insurance Agencies,  and Investments.
Home Building, Home Construction, Housing Related Industries, and Home Home based business, other home based businesses.
Health Care.
Horoscope and Fortune Telling.
Import and Export Companies.
Income Tax Preparatory Services, and Income Tax Return Services.
Insurance Agents and insurance brokers.
Internet businesses.
Insurance companies, Insurance Agencies, and  Investment Opportunities.
Lawyers.
Lotteries, Raffles, Gaming and Gambling.

Further restricted industry business loan type companies

Kiosks.
Lawyer and lawyers.  Attorney and Attorneys. Legal practice and Legal Practices.
Marinas.
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.
Night Clubs.
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 Businesses.
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

Schools.
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.
Vitamin Retailers.
Wholesale Clothing.
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 .
Construction companies
Detective services and Private Investigator Services or companies.
Diet companies or Diet program companies.
Donation Companies.   Door to Door Sales companies.
Employment Agencies.

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

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.

Construction Companies:

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:

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.

Seasonal Businesses

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.

Loans for Businesses in Prohibited or Restricted Industries

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:

Preferred Merchant List
They may be called a Challenged Merchant List.

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.

Why the bank declined my business loan: Tips on what to do about it

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?
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.
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Or call us at Tel:  1-919-771-4177, or Question? 

Reasons why your business loan was declined

FAQ Frequently asked questions on why the bank declined my business loan

Why don’t banks lend to small business?
Banks do not lend to small businesses much because small business is considered a higher risk than larger businesses. There are several reasons for this. A small business usually has to have excellent personal and business credit as well as strong collateral and financial statements. In most cases the collateral has to be a certain type that can be liquidated easily and quickly. The collateral may have to have a value between 200% and 1000% of the amount of the loan. Financial statements must show steady or increasing gross income and enough net income to service the new debt payments.
How can I get a successful business loan?
You can get a successful business loan by first understanding as many of the different types of business loans available in the marketplace as you can. Then have a good knowledge of what it takes to get approved for the various business loans and what are the most common reasons your business will be declined. Combine this with understanding the strengths and weaknesses of your business
Are sba loans easy to get?
SBA loans are not easy to get. They require a great deal of paperwork to be completed. The sba paperwork includes a lot of information you have to give to the sba and many questions you must answer. Having to provide vastly more information than other lenders require gives the sba more information that can end up being a decline reason. The sba loan process takes many weeks or months. You may spend many weeks working on an sba loan only to be turned down close to the end of the process. If you are considering an sba loan then it is suggested to spend more time upfront with an sba representative discussing the process and requirements in detail before applying.

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.