What To Do If a Bank Declines Your Business Loan Application

Being declined by a bank can feel like a setback, but it’s far from the end of the road. In fact, many successful businesses have faced the same challenge and gone on to secure the funding they needed through alternative routes.

Why was your application declined?

Understanding the reason behind the rejection is essential before taking your next step.

a person struggling with their finances
1

Credit History

  • Poor personal or business credit scores can be a red flag for traditional lenders
  • Check your credit report and address any issues
2

Financial Performance

  • Inconsistent revenue or limited trading history may impact your eligibility.
  • Prepare clear financial statements or forecasts to present a stronger case
3

Industry Sector

  • Some sectors are considered higher risk by mainstream banks
  • You may be better matched with specialist lenders who understand your industry

Should you apply somewhere else?

Yes, but take a considered approach. Shopping around without a clear plan can harm your credit file due to multiple hard searches.

Here are your options:

  • Specialist lenders
     These lenders often have more flexible criteria and focus on your business potential
     They may look beyond your credit score and consider your trading history or pipeline

  • Alternative finance providers
     Options include asset finance, invoice financing and revenue-based loans
     These can be faster to secure and more tailored to your business model

  • Government-backed schemes
     Programmes like the Recovery Loan Scheme (RLS) are available through select lenders
     Designed to support viable UK businesses that have been turned down by banks

  • Broker support
     Finance brokers can help you navigate the lending landscape
     They match you with lenders suited to your business profile and reduce the chance of further rejections
Decline Elsewhere? Apply With Liquidity Solutions
a person deciding what their options are for finance

Final thoughts

A decline is not a dead end. With the right advice and a revised strategy, you could find a better funding fit for your business. Focus on improving your application and exploring the wider lending market.

Find Out If Your Eligible For a Small Business Loan Today