If the banks say no

First, find out why

Banks rarely give a real reason. You will usually get a line about credit policy, which tells you nothing you can act on. That matters, because applying again without knowing the reason tends to produce the same answer, and applications you have running at the same time can show on a CCRIS report while they are still open.

In our experience the reason is almost always one of five things: too little trading history, bank conduct over the last six months, existing commitments including facilities the directors hold personally, a sector the bank has just tightened on, or an application for the wrong facility. Four of those five are fixable, and three of them are fixable within a few months.

What usually needs to change

A decline by one bank is not a decline by the sector

Credit appetite is not uniform. Banks tighten and loosen by sector, by facility type and by quarter, and two banks looking at the same file in the same month can reach opposite conclusions. Before assuming the answer is no everywhere, there are four routes still inside the banking system worth working through.

• A different bank, with the same file presented properly. The most common reason we get an approval after a decline is not a better business, it is a better match. Some banks are open to construction and some are not. Some will look at two years of trading and some want three. This is the part an adviser is actually for.
• A different facility at the same bank. Asking for a term loan when the problem is a receivables gap is the most common avoidable decline we see. Invoice financing and asset-backed facilities are frequently approved where unsecured lending is not, because the security is the invoice or the machine rather than the company.
• A government-guaranteed route. CGC guarantee schemes and BNM’s SME funds exist precisely for businesses that are sound but do not clear a bank’s ordinary criteria. There is still a bank in the middle, so this is a bank application with better odds rather than a way around one. Eligibility rules are specific and they change.
• Fixing the business case first. Not an option anyone sells you, but frequently the right one. If the facility would service a problem rather than a plan, more borrowing makes the position worse, and we would rather tell you that.

See the banks and institutions we submit to →

Warning signs when someone offers to fix it

A decline makes a business a target. Most of the complaints in this industry come from the same handful of behaviours, and they are easy to recognise once you know them. None of these is normal, from us or from anyone else.

• A processing, arrangement or “approval” fee asked for before anything has been approved. This is the single most common complaint in the industry, and it is the reason we charge nothing until a facility completes.
• A promise or guarantee of approval. Nobody outside the bank can give you one, because nobody outside the bank makes the decision.
• Any suggestion that figures, accounts or bank statements be adjusted to fit a bank’s criteria. That is fraud, it ends the relationship with us, and it is the client who carries it.
• Pressure to sign quickly, or terms that expire today
• Asking to hold your identity card, bank card or online banking credentials. No bank and no legitimate adviser needs any of these.
• Contact only through a messaging app, with no registered office you can visit

What we would do

If you have been declined, the first call is free and it is worth having before you apply anywhere else. We will tell you what we think the reason was, whether it is fixable, and roughly how long. If the answer is that you should wait three months and fix your bank conduct, we will say that, even though it means we are not paid.

We are paid a success fee only when a bank facility completes, so there is no version of this where it pays us to push you into borrowing you should not take.