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.
To Call tap Tel # link, CALL US, Press Dial.
We can work with businesses to get past decline reasons, get approved and get financing.
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.
Insufficient collateral means you or your business do not have the assets the lender requires to secure a loan. Programs vary from lender to lender. If you received this decline reason, then check with other lenders or consider other business loan programs.
What can be used as collateral for a secured loan?
Many types of assets can be used as collateral for a business loan depending on the lender and the program. For example, accounts receivables, equipment, vehicles, stocks and real estate are commonly used.
What if I don’t have collateral?
If your business does not have collateral for a loan, then consider a cash flow loan or unsecured loan. Most unsecured business loans look at your monthly business deposits. Other unsecured programs also look at tax returns, financial statements as well as business and personal credit.
Why do I have to have collateral?
Collateral may be required because the lender needs security in order to even offer a business loan. The lender sells the collateral when a borrower defaults and recovers much or all of what is owed on the loan. This often lets the lender offer more approvals and make more aggressive offers. As a result, they will lose less from default customers through the collateral in the loan.
Thank you for visiting our page on how to get approved for a business loan after being declined for not enough collateral. Tips, resources, and an
FAQ Page also included.
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
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.
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 deficit in a bank account caused by drawing more money than the account holds in part because of low deposit volume. Businesses use MCA Merchant Cash Advances and ACH Bank loans to finance their businesses.
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.
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 Frequently asked questions on too many overdrafts and nsf’s for business loans
Will overdrafts and nsf’s keep me from getting a business loan?
Overdrafts and nsfs will make it harder to get a business loan. Your business may be declined or get approved
for a lower amount with higher rates and shorter terms.
How many overdrafts and nsfs can I have and still get a business loan?
Most business loans limit overdrafts and nsfs to 5 maximum per month. Ask specifically for any business
financing you may apply for. Some programs will not allow any overdrafts, especially recently.
Our business had overdrafts and nsf’s recently. Will that cause us to be declined for a business loan?
Overdrafts in your business checking account in the last 30 days will have the biggest affect, but the last 90 days are often looked at overall. Rules on how many vary from lender to lender. Check with a representative
My business was declined for having too many nsf’s but they were paid. Why does it matter?
Nsfs and overdrafts happen when there are cash flow issues or low balances. If your business is overdrawn and has had returned items then lenders will not believe it can handle an additional monthly payment.
Frequent Requests by callers and applicants:
– I was declined for a merchant cash advance for having too many Overdrafts and too many NSFs. Help me get a merchant cash advance.
– I was declined for a business loan for excessive Overdrafts and NSF’s. What can our business do to get a loan with too many nsfs?
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 for 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. You can 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
and Account Receivables. Monthly Term loans up to 60 months or longer with full financials.
Representatives service the following cities in the Western Region and can be contacted.
Alaska, Hawaii and California
In Anaheim, CA and Anchorage, AK. Bakersfield, CA and also in Carlsbad, CA. Chula Vista and also Fontana, CA. Fremont, CA and in Fresno, CA. Hayward, CA and Honolulu HI. Irvine, CA and in Madera, CA. Modesto, CA and also Merced, CA. Oakland, CA and in Ontario, CA. Oxnard, CA and Riverside, CA. Roseville, CA and in San Francisco, CA. San Jose, CA and also San Diego, CA. Santa Ana, CA and in Santa Clara, CA. Santa Rosa, CA and Sacramento, CA. Salinas, CA and in San Bernardino, CA. In Santa Barbara, CA and also Santa Maria, CA. Sunnyvale, CA and in Stockton, CA. Thousand Oaks, CA and Vallejo, CA. Ventura, CA and also in Visalia, CA.
Representatives in the following cities may also be contacted:
Nevada, Oregon and Washington:
In Bellevue, Washington and Eugene, OR. Everett, WA and in Henderson, NV. Kent, Washington in addition to Las Vegas, NV. Olympia, WA and also Portland. Reno, NV and Seattle, WA. Olympia, WA and in Paradise, NV. Portland, OR in Renton, Washington. Salem, OR and in Seattle, WA. Sparks, NV as well as Spokane, WA. Tacoma, WA, Vancouver, Washington and Yakima, Washington.
Arizona and Utah:
Albuquerque, AZ and Avondale, AZ. Chandler, AZ and in Flagstaff, AZ. Gilbert, AZ and in Glendale, AZ. Goodyear, AZ and also Mesa, AZ. Nogales, AZ as well as Ogden, UT. Phoenix, AZ and in Peoria, AZ. Provo, UT and Scottsdale, AZ. Salt Lake City, UT and also Scottsdale, AZ. Surprise, AZ and also in Tempe, Arizona. Tucson, AZ, Yuma, AZ and San Tan Valley, AZ.
Colorado, Idaho, Montana, New Mexico and Wyoming:
In Albuquerque, NM, Aurora, CO. Boise, ID and in Cheyenne, WY. Colorado Springs, CO as well as Denver, CO. Helena, MT and Lakewood, CO as well as Santa Fe, NM.
Consultants in the following cities can be called to schedule a same day appointment
Kentucky, Virginia, Washington, D.C., and West Virginia: In Alexandria, VA and Arlington, VA. Chesapeake, VA and in Hampton, VA. Huntington, WV and also in Kenner, VA and Lexington, KY. Louisville, KY as well as Lynchburg, Virginia. Newport News, VA and in Norfolk, VA. Petersburg, VA and also in Portsmouth, Virginia. Richmond, VA and Roanoke, Virginia. In Suffolk, Virginia and also Virginia Beach, VA.
North Carolina, South Carolina:
In Anderson, SC and Asheville, NC. Cary, North Carolina and also in Chapel Hill, NC. Charleston, SC and in Charlotte, NC. Chattanooga, TN as well as Columbia, SC. Concord, NC and Davidson, TN. Dunn, NC, Durham, NC and Fayetteville, NC. Franklin, TN, Gastonia, NC. as also in Greensboro, NC. Greenville, SC, Henderson, NC as well as Hickory, NC. High Point, NC, Kingsport, TN and Knoxville, TN. In Maudlin, SC, Memphis, TN and also Morristown, TN. Murfreesboro, TN, Myrtle Beach, SC and Nashville, TN. North Charleston, South Carolina as well as Raleigh, NC. Sanford, NC, Lenoir City, TN and in Shelbyville, TN. Spartanburg, SC, Wilmington, North Carolina and Winston-Salem, NC.
In Cape Coral, FL, Clearwater, FL and Daytona Beach, FL. In Jupiter, FL, Fort Myers, FL as well as Ft. Lauderdale, FL. Hialeah, FL, Jacksonville, FL and Lakeland, FL. Melbourne, FL, Miami, FL and Ocala, FL. Pensacola, FL, Kissimmee, FL as well as Naples, FL. Orlando, FL, Ormond Beach, FL and also in Palatka, FL. In Palm Bay, FL, Pensacola, FL and also Port St. Lucie, FL. Saint Petersburg, FL, Sanford, FL and Tallahassee, FL. In Tampa, FL, West Palm Beach, FL as well as Winter Haven, FL.
Alabama, Georgia, and Mississippi:
In Atlanta, GA, Augusta, GA and Birmingham, AL. Gulfport, MS, Hoover, AL and also Huntsville, AL. Jackson, MS, Mobile, AL as well as Montgomery, AL. Savannah, GA, St. Mary’s GA and also in Talladega, AL.
Arkansas and Louisiana:
In Baton Rouge, LA and Fayetteville, AR. Forrest City, AR, Lafayette, LA and Little Rock, AR. Metairie, LA and New Orleans, Louisiana. Baton Rouge, Louisiana, Shreveport, Louisiana and also Lafayette, Louisiana.
Oklahoma and Texas:
In Arlington, TX and Austin, TX. Bartlesville, OK, Beaumont, TX and in Corpus Christi, TX. Dallas, TX, Edinburg, TX and in El Paso, TX. Ft. Worth, TX, Houston, TX as well as Killeen, TX. Lafayette, LA, Mission, TX and Muskogee, OK. Oklahoma City, OK, McAllen, TX and also in New Braunfels, TX. Round Rock, TX, San Antonio, TX, as well as Shawnee, OK. Sugarland, TX, and The Woodlands, TX as well as Tulsa, OK.
Representatives in the following Midwest cities can be contacted:
Illinois, Indiana, Wisconsin:
In Anderson, IN, Carmel, IN, and Aurora, Illinois. Chicago, Illinois, Elgin, Illinois as well as Rockford, Illinois. Joliet, Illinois, Lee’s Summit, Missouri and in Naperville, Illinois. Springfield, Illinois, Peoria, Illinois and also in Elgin, Illinois. Waukegan, Illinois, Cicero Town, Illinois as well as Champaign, Illinois. Bloomington, Illinois, Decatur, Illinois and Eau Claire, WI. Fort Wayne, IN, Gary, IN and in Indianapolis, IN. Madison, WI, Milwaukee, WI and Naperville, IL. Green Bay, Wisconsin, Kenosha, Wisconsin, and Peoria, IL. Racine, WI, Springfield, IL and also Waukesha, WI.
Michigan and Ohio:
In Akron, OH, Ann Arbor, MI and Canton, OH. Cincinnati, OH, Cleveland, OH and also Columbus, OH. Dayton, OH, Dearborn, MI and in Detroit, MI. Flint, MI, Grand Rapids, MI as well as Marion, OH. Maysville, OH, Muskegon, MI and Parma, Ohio. Toledo, OH, Wilmington, OH, Wyoming, MI and also Youngstown, OH.
Kansas, Nebraska, North Dakota and South Dakota:
In Council Bluffs, NE and Kansas City, MO. Lawrence, KS, Omaha, NE as well as Wichita, KS.
Iowa, Minnesota, and Missouri:
In Bloomington, MN and Columbia, MO. Davenport, IA, and also Des Moines, IA. Duluth, MN and also Independence, Missouri. Kansas City, Missouri and Minneapolis, MN. Overland Park, MO as well as Rochester, Minnesota. Springfield, MO, St. Charles, MO as well as St. Joseph, MO. Springfield, Missouri and St. Louis, Missouri. St. Paul, Minnesota and St. Cloud, MN.
In Albany, NY, Batavia, NY and Buffalo, NY. Cheektowaga, NY, New York City, NY as well as Niagara Falls, NY. Rochester, NY, Schenectady, NY, Seneca Falls, NY and Syracuse, NY.
Maine, Vermont, New Hampshire and Massachusetts:
In Bangor, ME and Boston, MA. Burlington, VT, Cambridge, MA and Concord, NH. Montpelier, VT, Newton, MA as well as Portland, ME. Providence, MA and Springfield, MA. In Warwick, MA as well as Worcester, MA.
Pennsylvania, Maryland and Delaware:
In Allentown, PA and Baltimore, MD. Bethlehem, PA, Columbia, MD and Dover, DE. Harrisburg, PA, Lancaster, PA and in Lansing, MI. Lebanon, PA, Manchester, PA as well as New Castle, PA. Philadelphia, PA, Pittsburgh, PA and also Reading, PA. In Salisbury, MD, Scranton, PA and Towson, MD. In Weirton, PA, Wilmington, DE and also in York, PA.
Connecticut, New Jersey and Rhode Island:
In Bridgeport, CT and Camden, NJ. Hartford, CT, Jersey City, NJ as well as Milford, CT. New Haven, CT, New London, CT and Newark, NJ. Norwalk, CT and Norwich, CT. Providence, RI, Stamford, CT and also in Trenton, NJ.
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.
Business loan applications are sometimes declined for not enough deposits.
Businesses have used cash flow loans to a great extent in recent years to finance their businesses. The business account has limited activity or no activity in one of the most recent months.
How can your business fix being declined for a business loan for not enough deposits? There are several tips that your business can follow to get financing, either right away or in the short term. Apply below or see our FAQ Frequently asked questions below :
FAQ Frequently asked questions on being declined for a business loan for
not having enough deposits
My business was declined for not having enough deposits. How many deposits do we need each month?
The number of deposits your business needs depends on the type of loan the business is applying for. For a merchant cash advance, 5 deposits or more per month is best. Other business loans may require more or less.
Our business had more than 5 deposits per month, so why were we still denied for not having enough deposits?
Many businesses are declined for having deposits that are transfers from other accounts or deposits that are not from the operation of the business. Those types of deposits are not considered for an approval.
Our business only has 2 or 3 larger deposits per month. How can we qualify for loans that require more deposits?
Get more deposits per month and more customers. Lenders consider a low number of deposits into a business account as higher risk because it means the business has fewer customers that it earns revenue from. Losing 1 customer will impact revenues and ability to repay a loan much more. Some businesses request their customers to make smaller, more frequent payments. This shows a steadier income which lenders consider lower risk.
How to get approved.
Talk to lenders in advance and find out if the lender has a minimum number of deposits per month needed to be approved for financing. We can direct your business to these programs so that you can apply for the right program and can get approved.
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
What are the top 6 business loan decline reasons? Tips on easy things you can do to prevent many of these declines are easy. Use the following list to increase your chances of getting approved for a business loan by avoiding the decline reasons listed.
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.
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.
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 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:
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.
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 business loan decline reasons
What are the main reasons businesses get denied for loans?
The top reasons businesses get rejected for loans are: derogatory personal credit, derogatory business credit, insufficient cash flow, lack of collateral, short time in business and industry type.
Why do I keep getting denied for business loans?
Frequent denials for a business loan are in most cases due to bad credit, low sales and profit and not enough collateral. Ask the lender why your business was denied to see if some of the decline reasons are the same. Ask the lender if there is anything you can do to change the decline to an approval.
Our business was declined for credit. Is there anything I can do about it?
Ask if it was for personal credit, business credit or both. Try to get any credit bureau and business credit scores the lender will give you information on. Ask if there are minimum credit scores you did not meet and what those score are. Also ask how long you have to wait if you want to re-apply.
Our business was declined for not having enough revenue or cash flow, but we have good sales. What does that decline reason mean?
The lender determined that based on their criteria, your business does not have enough cash flow after expenses to safely pay the new debt. The lender did a cash flow analysis which may have included a debt to income ratio. If your business is about to payoff any current debt or is increasing revenues significantly, then let the lender know about this. It may be possible to reverse their decision or get an approval on 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:
Also, 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.
Thank you for visiting this page on the top 6 business loan decline reasons.
Restricted industry business loans target businesses that operate in industries considered undesirable by lenders. Lenders will decline businesses for being in a certain industry type. Has your business has been denied by a lender for being in a restricted industry? Get approved today through our programs. Apply now below. No SIC code denials. Apply below:
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.
FAQ Frequently asked questions on restricted industry business loans
What does restricted industry mean for a business loan?
Your business is in an industry the lender does not lend to. Lenders consider it a prohibited industry to lend to usually because they see it as a higher risk for losses and instability. Sometimes the lender simply does not have the expertise in that field.
Why were we declined for a small business loan for restricted industry?
The lender did not want to lend to businesses in your industry or specializes
in certain industry types instead. Ask the lender before applying if they lend to your industry.
My business was denied for being a new business, so what can I do to get approved and funded?
Make sure before applying that any lender and program your business is applying with will approve a new business. Ask if they consider new businesses a prohibited industry they do not lend to.
Can a lender refuse to say if they will not loan to our type of business?
Lenders may not want to say they will not lend to a certain industry. A business loan request declined because of the type of business instead of the ability of the borrower to repay could be questionable so therefore lenders may avoid this issue.
We applied for a business loan and were told we were not in a preferred industry. What does preferred industry mean?
Some lenders have categories of businesses they would prefer not to lend to but do not consider them prohibited. These lenders often call these challenged industries. The trucking and construction as well as used car industries are two examples. Lenders will scrutinize them more and require a longer time in business, higher credit scores and higher revenues.
Restricted industries or elevated scrutiny businesses – examples:
Many industries are restricted by lenders. For example, restricted industries include:
Adult Entertainment, Escort Services, Gentleman’s Club, and adult industries.
Airport companies and Airport related companies, Airlines, and Regional Airline Companies.
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 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.
Industries that are not restricted:
– Auto Repair
Seasonal Businesses have difficulty getting business 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.
Examples of 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:
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.
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. 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 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 from month to month. 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.