Financing made easy: Financing made easy
If Your Application Is Not Approved

Most lenders, particularly banks, are cautious in lending to companies. Given their obligation to their shareholders and depositors, they need to be sure there's a good chance the loans they make will be reimbursed.

If your credit application is not approved, find the reasons why. Some of the reasons why lenders often denied a busuness loan are for example, lack of equity in the enterprise; the absence of sufficient income; a history of slow or past-due loan payments; or insufficient collateral.

Finding out the reasons will help you qualify the next time you apply.

The lender will keep you informed of the status of your request. If you are considered a "small business" (when your business income is $ 1 million or less, or when you apply for starting a business), a lender has 30 days to let you know, either orally or in writing if you do or not obtain the loan.

This time period begins 30 days after the lender has received all the necessary information to evaluate your credit application. If your request is denied, the lender must give you either:
  • a written statement of the reasons for refusal, or
  • a written notice informing of your right to obtain the reasons in writing. This notice may be given to you while the application process or at the moment of the refusal.
The lender also will keep for one year the documentation concerning your application.

Different set of rules apply to large companies (those with more than $ 1 million in business income). Within a reasonable time period after receiving all necessary information on which to base its decision, the lender will decide whether or not you obtain the credit. Then there is a 60 days time frame to request a written statement of the reasons why you were refused the credit, this is something important to remember because the lender does not have to inform you of this right. The creditor will keep records of your request for at least 2 months after informing you of the credit decision. If within 60 days you request that the documents be kept longer, or request a written statement of the reasons for refusal, the files will be kept for one year.
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Your Application Not Approved
Equal Credit Opportunity Act
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