Turned down by the bank and every lender since? Start here

This page is for the owner who has done the rounds. The bank said no. An online lender said no. A broker sent the file somewhere and that said no too. Perhaps you’ve filled in so many forms that you’ve stopped counting. If that’s you, take a breath. A run of declines is one of the most fixable situations we see, provided you stop doing the thing that’s making it worse.

Why do declines snowball?

Every formal credit application usually leaves an enquiry on your credit file. Lenders read a burst of recent enquiries as a sign that other lenders have looked and passed, so they assume there’s a reason and become more cautious. That makes the next decline more likely, which leads to another application, and the circle tightens.

It gets worse with online forms that send your details to multiple lenders at once. Each one may run its own check. In a single afternoon, a business owner can collect half a dozen enquiries without realising it. We work the other way around: no credit check at the first conversation, then one application to the lender most likely to approve.

Finding the real reason behind the declines

Repeat declines almost always trace back to one or two root causes. Lenders aren’t always clear about them, so it’s worth working through the list honestly:

• A credit event such as a default, judgment or past insolvency. See bad credit and defaults and judgments.
• Tax. An unpaid ATO balance, or BAS and tax returns that aren’t lodged. See ATO debt.
• Existing lenders already in the bank account. Daily or weekly repayments to other lenders are a red flag. See too much existing debt.
• Patchy deposits. Big months followed by empty ones. See irregular income.
• Thin history. Under 12 months of trading. See new business loans.
• The industry itself. Some lenders simply won’t touch certain sectors. See hard-to-fund industries.
• Mismatch. The most common one: asking a lender for something outside its policy, such as $400,000 unsecured from a lender that caps at $150,000.

Once the cause is named, the next lender can be chosen for its policy on exactly that issue.

Which lenders fund files that have been declined repeatedly?

Situation	Lender type that tends to fit
Own property with equity	Private lenders: caveat loans, second mortgages, private first mortgages
Steady deposits, no property	Specialist unsecured and line-of-credit lenders that read the story
Strong customer invoices	Invoice finance, where the debtor’s strength matters most
Needs equipment or vehicles	Asset finance, secured on the item itself
Family member willing to help	A guarantor-supported loan with clear limits

Private lenders in particular can move quickly. For a straightforward property-secured file, funding is possible in as little as 24 hours once approved. Read more about private business lenders and second mortgage business loans.

How to present a file that’s been knocked back

A file that’s already been around the market needs to be tidier than usual, not messier:

1. One summary. Half a page: what the business does, how much you need, what it’s for, and how it gets repaid.
2. An honest explanation of the credit issues and the previous declines. Lenders find out anyway; it’s better coming from you.
3. Six to twelve months of bank statements, complete, with no pages missing.
4. Proof of the exit. If the loan will be repaid from a property sale, a refinance or a contract, show the paperwork.
5. Accurate numbers. Don’t round up turnover or round down debts. Discrepancies cause more declines than bad credit does.

Our guide on how alternative lenders read a difficult file goes deeper into what they’re looking for.

An illustrative example

A Newcastle plumbing business (illustrative only) needed $85,000 to buy a second van and fund wages for a new commercial contract. In six weeks the owner had applied to his bank, two online lenders and a comparison site that passed his details on to several more. Every answer was no, and his credit file now showed a cluster of new enquiries.

When we looked at the file, the root cause was simple. Two old telco defaults from a previous partnership were still listed, and the business already had a small daily-repayment loan from an online lender showing in the statements. Every lender’s scorecard caught one or the other. The fix wasn’t a seventh application. It was a short written explanation of the defaults, proof the daily loan would be paid out from the new funds, and one application to a lender that funds trades businesses on bank statements and is comfortable with old, explained defaults. One application, one approval.

When more borrowing isn’t the answer

Sometimes a run of declines is the market telling you something. If the business is losing money at its core and a loan would only delay the problem, a conversation with your accountant or a registered adviser may be the better first step. We’ll tell you plainly if we think that’s the case, because a loan you can’t repay helps nobody.

Break the cycle with one conversation

If the declines keep coming, stop applying and talk to us first. Your enquiry takes about a minute and doesn’t involve a credit check. We won’t shop your file around to dozens of lenders. A real person will look at why you’ve been knocked back and tell you who is most likely to say yes. Tell us about every decline on the form; it’s the fastest way to avoid adding another one. Start your enquiry.