Being rejected for business loans
Being declined for a business loan can be very frustrating for small business owners. If you have specific plans for growth, and the funds you need aren’t coming your way after all, those improvements have to go on hold. This can make it harder to run your business both short term and long term.
Anyone who applies for credit knows there’s a possibility they’ll be rejected. It can come as a bit of a shock though when the application seems to be going well. Here are a few things to consider if you’re declined for a business loan.
- Press pause on the applications
- Understanding negative credit
- Alternative loans and lending options
- Rebuilding your personal and business credit
- Will Capify accept me if I’ve been declined by the banks?
- Raise up to 130%* of your average monthly turnover
Press pause on the applications
Being declined can make some business owners want to try again with a different lender. Be careful though – hard checks on your credit file can have a negative impact. The more applications you make, the less reliable you can seem to a lender.
Soft credit checks don’t show up on your credit file, so you can check your eligibility without worrying about it damaging future applications.
Understanding negative credit
If you’ve been declined recently, there could be a few reasons why. Your credit score depends on how you’ve managed your bill payments, lines of credit you’ve taken out in the past, and how long you’ve been in business.
If all your payments have been on time, your score will be pretty healthy and you should be approved easily. If you were declined, it’s possible there are some late payments in your history. These will usually stay on your credit report for at least 5 years.
Alternative loans and lending options
Banks and traditional lenders usually have slightly tougher criteria for borrowers. If your record isn’t spotless, you might struggle to get approved. Even if you are approved, some lenders will raise the interest rates to an unmanageable level because they see you as a greater risk.
Some alternative finance providers can offer more flexible products designed for small businesses with different needs.
Rebuilding your personal and business credit
If you’ve been declined recently, you might start thinking about making improvements to your credit report.
Whether you’re a sole trader or a limited company, you’ll have a better chance of being approved if:
- You pay bills on time
- You file with HMRC and Companies House regularly and before the deadlines.
- Your business details and addresses are all up to date.
- You don’t owe very much to other lenders and providers, or have paid off previous debts.
- Your business has been consistently active for a few years.
Will Capify accept me if I’ve been declined by the banks?
Just because you’ve been turned down by other lenders in the past, doesn’t mean you’re going to find it just as difficult in the future.
If you meet our eligibility criteria, we could still raise from £5,000 to over £500,000 for your business.
Raise up to 130%* of your average monthly turnover
Capify’s small business loan is repaid in manageable daily or weekly amounts. It’s ideal for small businesses that need a flexible approach to finish.
Loans are available from £5,000 to over £500,000. Get a quick quote now to find out how much your business can raise with Capify. If you’re approved, you’ll get your cash within days.
*Subject to terms
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