I'm curious about this. I applied for a small business loan with my current bank where I've had a business checking account for about four years. They denied me, citing insufficient collateral and a short credit history for the business. I've been operating for two years and have steady revenue. A friend mentioned trying a different bank or credit union. Has anyone here been turned down by one bank and then approved by another? What changed, and how did you approach the second bank differently?
Banking
Has anyone been denied by one bank and approved by another?
Yes, happened to me. My first bank denied a line of credit because my business was only 18 months old. A local credit union approved me for a smaller amount after I provided a more detailed cash flow projection. The key was that the credit union had a specific program for newer businesses.
Different banks have different risk appetites. Big banks often use rigid algorithms. Community banks or credit unions may look at the whole picture. If you have a personal relationship with a banker, that can help too.
What type of loan are you applying for? SBA loans can be easier at certain banks that are preferred lenders. Maybe check with a bank that specializes in SBA.
I was denied by Wells Fargo and approved by a regional bank. The regional bank had a program for minority-owned businesses. It's worth asking around about specific programs.
Also, make sure your credit report is clean. Sometimes a denial is due to something you can fix. After I was denied, I found an error on my business credit report. Once I fixed it, I got approved at another bank.
Happens all the time. Banks have different lending criteria. Just because one says no doesn't mean you're unbankable. Keep trying.
How long did you wait be tween applications? I've heard that too many inquiries in a short period can hurt your score. Also, the second bank might ask why you were denied. Be honest and explain what you've done to address the issue.
I work at a credit union. We often approve loans that big banks deny because we have more flexibility and know our members. But we also have to be responsible. If you have a solid business plan and can show repayment ability, it's worth a shot.
I've been in business for 20 years. My advice is to buiLd a relationship with a smaller bank. They'll take the time to understand your business. Big banks just look at numbers.
I was denied by two banks before getting approved by a third. The third bank was a community bank that I had a personal account witxh. They approved me for a smaller amount, but it was enough to get started. It's frustrating but keep at it.
One more thing: consider applying for a credit card with 0% intro APR to help with cash flow while you search for a loan. That's what I did after my deniaL.