{"id":3102,"date":"2022-08-25T09:23:29","date_gmt":"2022-08-25T14:23:29","guid":{"rendered":"https:\/\/www.headwaycapital.com\/blog\/?p=3102"},"modified":"2022-10-07T13:43:12","modified_gmt":"2022-10-07T18:43:12","slug":"application-declined","status":"publish","type":"post","link":"https:\/\/www.headwaycapital.com\/blog\/application-declined\/","title":{"rendered":"What To Do if Your Application Is Declined"},"content":{"rendered":"<p>Funding is essential to running a small business. Whether you\u2019re just starting out or looking to grow, having the right financing can be the difference between success and failure. Still, it can be hard to obtain funding. According to a 2020 estimate, nearly four out of five small businesses were denied loans from big and small banks.<sup>1<\/sup><\/p>\n<p>Being denied financing is scary \u2014 especially if you\u2019re trying to keep your doors open during uncertain times. If you\u2019ve been denied, don\u2019t lose hope. There are steps you can take to secure the financing you need.<\/p>\n<h2><b>Determine Why You Weren\u2019t Approved<\/b><\/h2>\n<p>First, figure out why your application was rejected. Knowing what went wrong can help you identify areas for improvement, strengthening your future applications and boosting your chances of approval. Here are a few common reasons applications are denied.<\/p>\n<ul>\n<li><b>Your Credit Score Is Too Low<\/b> \u2014 A damaged or subprime credit score is one of <a href=\"https:\/\/www.headwaycapital.com\/blog\/factors-business-credit\/\">the main reasons applications are rejected<\/a>. Lenders use this score to gauge your potential to default. Look at your credit score before applying to ensure you meet the lender\u2019s requirements.<\/li>\n<li><b>Insufficient Cash Flow<\/b> \u2014 If a lender believes you don\u2019t have the capacity to repay, it&#8217;s unlikely they\u2019ll approve your application. If you have cash flow limitations due to other debt or low revenue, this may be the reason you were denied.<\/li>\n<li><b>Lack of Collateral<\/b> \u2014 Some forms of financing require collateral that can be liquidated by the lender to recoup their losses if you fail to repay the debt. Lacking sufficient collateral can mean that you don\u2019t meet the necessary requirements.<\/li>\n<li><b>Risky Industry or Other Conditions <\/b>\u2014 Not all the factors are in your control. If the economic forecast isn\u2019t looking good, or your industry has been labeled as risky at the moment, lenders may be stingier with financing.<\/li>\n<li><b>Not Enough Time in Business <\/b>\u2014 Some lenders require your business to be in operation for a certain amount of time before they let you borrow money. This can vary from six months to two years. If you\u2019re starting a new business, this may be the reason you didn\u2019t get approved for financing.<\/li>\n<\/ul>\n<h2><b>Look Into Other Options<\/b><\/h2>\n<p>After you determine why your application was denied, you can start working to strengthen your business. In the meantime, if you need funding right away, you have other options available.<\/p>\n<ul>\n<li><b>Different Types of Financing <\/b>\u2014 Just because you were denied one type of financing doesn\u2019t mean that you don\u2019t qualify for other types. For example, if you\u2019re denied a business loan you may qualify for a <a href=\"https:\/\/www.headwaycapital.com\/line-of-credit\" target=\"_blank\" rel=\"noopener\">line of credit<\/a> \u2014 using other forms of credit can also help you build a positive credit history and boost your score.There are also financing options that don\u2019t require you to take on debt \u2014 <a href=\"https:\/\/www.headwaycapital.com\/invoice-financing\" target=\"_blank\" rel=\"noopener\">a purchase of receivables agreement<\/a> allows you to access cash now by selling invoices that are due in future.<\/li>\n<\/ul>\n<ul>\n<li><b>Alternative Lenders <\/b>\u2014 It\u2019s notoriously difficult to secure financing through a traditional bank \u2014 not to mention the hassle of their typically lengthy and complicated application processes. If you\u2019ve been denied by a bank, you can look for financing from alternative sources like online lenders. Online lenders tend to have more lenient requirements, easier application processes and fast funding.<\/li>\n<\/ul>\n<h2><b>Improve Your Credit Score and Boost Your Cash Flow\u00a0<\/b><\/h2>\n<p>If you want to ensure that you\u2019re able to secure financing for future growth, you may want to improve your credit score and boost your cash flow. This can help strengthen your business and make you a more appealing financial investment to lenders.<\/p>\n<ul>\n<li><b>Credit Score <\/b>\u2014 Building good business credit doesn\u2019t need to be difficult. Opening a business credit card or establishing tradelines with your vendors is a good way to establish a credit history. Just make sure you\u2019re making your payments on time and that all your information is up to date with the credit bureaus.<\/li>\n<li><b>Cash Flow <\/b>\u2014 Boosting your cash flow can put you on more solid financial footing. Start by finding ways to cut expenses like leasing instead of buying equipment. Then you can look for creative ways to incentivize your clients to pay early \u2014 maybe with early-payment discounts, or you could organize a sale. However you decide to improve your cash flow, make sure you monitor it so you can create an accurate cash flow forecast.<\/li>\n<\/ul>\n<p><strong>Sources:<\/strong><\/p>\n<p><sup>1<\/sup>Ward, S. (2020) <a href=\"https:\/\/www.thebalancesmb.com\/small-business-loan-2947070\" target=\"_blank\" rel=\"noopener\">Challenges of Getting a Small Business Loan<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Funding is essential to running a small business. Whether you\u2019re just starting out or looking to grow, having the right &#8230;<\/p>\n","protected":false},"author":31,"featured_media":3103,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[609],"tags":[715,714,716],"class_list":["post-3102","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-small-business-finance","tag-business-financing","tag-declined-application","tag-denied-funding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>What To Do if Your Application Is Declined - Headway Capital Blog<\/title>\n<meta name=\"description\" content=\"If your financing application has been denied, here are steps you can take to secure the funding you need for your small business.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.businessbacker.com\/blog\/application-declined\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What To Do if Your Application Is Declined - Headway Capital Blog\" \/>\n<meta property=\"og:description\" content=\"If your financing application has been denied, here are steps you can take to secure the funding you need for your small business.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.businessbacker.com\/blog\/application-declined\/\" \/>\n<meta property=\"og:site_name\" content=\"Headway Capital Blog\" \/>\n<meta property=\"article:published_time\" content=\"2022-08-25T14:23:29+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-10-07T18:43:12+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.headwaycapital.com\/blog\/wp-content\/uploads\/sites\/5\/2022\/08\/22-00288-01_SMB_HC-TBB-What-To-Do-if-Your-Application-Is-Declined-HC-1a01.png\" \/>\n\t<meta property=\"og:image:width\" content=\"751\" \/>\n\t<meta property=\"og:image:height\" content=\"393\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Baylee Patel\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Baylee Patel\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"What To Do if Your Application Is Declined - Headway Capital Blog","description":"If your financing application has been denied, here are steps you can take to secure the funding you need for your small business.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.businessbacker.com\/blog\/application-declined\/","og_locale":"en_US","og_type":"article","og_title":"What To Do if Your Application Is Declined - Headway Capital Blog","og_description":"If your financing application has been denied, here are steps you can take to secure the funding you need for your small business.","og_url":"https:\/\/www.businessbacker.com\/blog\/application-declined\/","og_site_name":"Headway Capital Blog","article_published_time":"2022-08-25T14:23:29+00:00","article_modified_time":"2022-10-07T18:43:12+00:00","og_image":[{"width":751,"height":393,"url":"https:\/\/www.headwaycapital.com\/blog\/wp-content\/uploads\/sites\/5\/2022\/08\/22-00288-01_SMB_HC-TBB-What-To-Do-if-Your-Application-Is-Declined-HC-1a01.png","type":"image\/png"}],"author":"Baylee Patel","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Baylee Patel","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.businessbacker.com\/blog\/application-declined\/#article","isPartOf":{"@id":"https:\/\/www.headwaycapital.com\/blog\/application-declined\/"},"author":{"name":"Baylee Patel","@id":"https:\/\/www.headwaycapital.com\/blog\/#\/schema\/person\/883f5a90a4509a92d6d541c166d7c8aa"},"headline":"What To Do if Your Application Is Declined","datePublished":"2022-08-25T14:23:29+00:00","dateModified":"2022-10-07T18:43:12+00:00","mainEntityOfPage":{"@id":"https:\/\/www.headwaycapital.com\/blog\/application-declined\/"},"wordCount":746,"image":{"@id":"https:\/\/www.businessbacker.com\/blog\/application-declined\/#primaryimage"},"thumbnailUrl":"https:\/\/www.headwaycapital.com\/blog\/wp-content\/uploads\/sites\/5\/2022\/08\/22-00288-01_SMB_HC-TBB-What-To-Do-if-Your-Application-Is-Declined-HC-1a01.png","keywords":["business financing","declined application","denied funding"],"articleSection":["Small Business Finance"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/www.headwaycapital.com\/blog\/application-declined\/","url":"https:\/\/www.businessbacker.com\/blog\/application-declined\/","name":"What To Do if Your Application Is Declined - Headway Capital Blog","isPartOf":{"@id":"https:\/\/www.headwaycapital.com\/blog\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.businessbacker.com\/blog\/application-declined\/#primaryimage"},"image":{"@id":"https:\/\/www.businessbacker.com\/blog\/application-declined\/#primaryimage"},"thumbnailUrl":"https:\/\/www.headwaycapital.com\/blog\/wp-content\/uploads\/sites\/5\/2022\/08\/22-00288-01_SMB_HC-TBB-What-To-Do-if-Your-Application-Is-Declined-HC-1a01.png","datePublished":"2022-08-25T14:23:29+00:00","dateModified":"2022-10-07T18:43:12+00:00","author":{"@id":"https:\/\/www.headwaycapital.com\/blog\/#\/schema\/person\/883f5a90a4509a92d6d541c166d7c8aa"},"description":"If your financing application has been denied, here are steps you can take to secure the funding you need for your small business.","breadcrumb":{"@id":"https:\/\/www.businessbacker.com\/blog\/application-declined\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.businessbacker.com\/blog\/application-declined\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.businessbacker.com\/blog\/application-declined\/#primaryimage","url":"https:\/\/www.headwaycapital.com\/blog\/wp-content\/uploads\/sites\/5\/2022\/08\/22-00288-01_SMB_HC-TBB-What-To-Do-if-Your-Application-Is-Declined-HC-1a01.png","contentUrl":"https:\/\/www.headwaycapital.com\/blog\/wp-content\/uploads\/sites\/5\/2022\/08\/22-00288-01_SMB_HC-TBB-What-To-Do-if-Your-Application-Is-Declined-HC-1a01.png","width":751,"height":393,"caption":"Steps To Take if You Were Denied Business Financing"},{"@type":"BreadcrumbList","@id":"https:\/\/www.businessbacker.com\/blog\/application-declined\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.headwaycapital.com\/blog\/"},{"@type":"ListItem","position":2,"name":"Small Business Finance","item":"https:\/\/www.headwaycapital.com\/blog\/category\/small-business-finance\/"},{"@type":"ListItem","position":3,"name":"What To Do if Your Application Is Declined"}]},{"@type":"WebSite","@id":"https:\/\/www.headwaycapital.com\/blog\/#website","url":"https:\/\/www.headwaycapital.com\/blog\/","name":"Headway Capital Blog","description":"Your source for the latest news, tools, tips and resources to help your small business succeed.","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.headwaycapital.com\/blog\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.headwaycapital.com\/blog\/#\/schema\/person\/883f5a90a4509a92d6d541c166d7c8aa","name":"Baylee Patel","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.headwaycapital.com\/blog\/wp-content\/uploads\/sites\/5\/2022\/12\/me-150x150.jpeg","url":"https:\/\/www.headwaycapital.com\/blog\/wp-content\/uploads\/sites\/5\/2022\/12\/me-150x150.jpeg","contentUrl":"https:\/\/www.headwaycapital.com\/blog\/wp-content\/uploads\/sites\/5\/2022\/12\/me-150x150.jpeg","caption":"Baylee Patel"},"description":"Baylee Patel, CFEI, is a copywriter specializing in finance. Before joining Enova in 2022, she worked for a financial planning firm in Northern Virginia, where she regularly contributed articles on financial literacy, personal finance and other monetary trends. She graduated from Virginia Commonwealth University with a bachelor's degree in communications and received her certification for financial education instruction from the National Financial Educators Council.","sameAs":["https:\/\/www.linkedin.com\/in\/bayleealerding\/"],"url":"https:\/\/www.headwaycapital.com\/blog\/author\/balerding\/"}]}},"acf":[],"_links":{"self":[{"href":"https:\/\/www.headwaycapital.com\/blog\/wp-json\/wp\/v2\/posts\/3102","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.headwaycapital.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.headwaycapital.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.headwaycapital.com\/blog\/wp-json\/wp\/v2\/users\/31"}],"replies":[{"embeddable":true,"href":"https:\/\/www.headwaycapital.com\/blog\/wp-json\/wp\/v2\/comments?post=3102"}],"version-history":[{"count":8,"href":"https:\/\/www.headwaycapital.com\/blog\/wp-json\/wp\/v2\/posts\/3102\/revisions"}],"predecessor-version":[{"id":3121,"href":"https:\/\/www.headwaycapital.com\/blog\/wp-json\/wp\/v2\/posts\/3102\/revisions\/3121"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.headwaycapital.com\/blog\/wp-json\/wp\/v2\/media\/3103"}],"wp:attachment":[{"href":"https:\/\/www.headwaycapital.com\/blog\/wp-json\/wp\/v2\/media?parent=3102"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.headwaycapital.com\/blog\/wp-json\/wp\/v2\/categories?post=3102"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.headwaycapital.com\/blog\/wp-json\/wp\/v2\/tags?post=3102"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}