What to do after a Declined Business Loan Application?

If your application for a business loan was denied, it can be extremely disheartening. However, don’t lose hope, because it’s still possible to get approved for a business loan in the future.

In this blog post, we’ll enumerate why your application was denied and tell you what you can do to keep your small business loan application from being denied.

1. Assess why your loan application was denied

If you had your application denied, it doesn’t necessarily indicate that you won’t be able to apply to other loan offering services again. However, before you start the loan process again, you should ask the lender why your application was denied. Common reasons for getting declined after applying for a business loan include:

Poor credit score. Getting a low credit score might be the lender’s reason for denying your application. You might not have met their requirements; thus, before reapplying, check your credit report to ensure that you meet the credit perquisites.

Debt to income ratio. If your business has a high debt to income ratio, you may need to pay down debt prior to applying for a loan amount. Lenders often don’t want to lend to businesses with low cash flow due to outstanding debt.

2. Improve your credit scores

Lenders also consider and evaluate your business credit history when deciding whether to grant a loan. They do this because by reviewing your personal and business credit scores, they can get a clear picture of your finances. Improve your credit score by applying for loans or cash funding under your store’s name. Avoid funding your business through personal loans, which don’t contribute to your business credit history.

3. Look for another company that provides cash funding

If your loan application was rejected by a lending company, find a lender who will be more receptive. There are countless online lenders who are more willing to work with startups or small businesses than traditional lending institutions - try considering Kayamo. One of the most trusted and legit lending companies in the Philippines is Kayamo. It is the official financing partner of Lazada Philippines. Moreover, the company has already been attending to thousands of Shopee and Lazada Sellers in the country. To learn more about Kayamo, you may visit www.kayamo.ph.