The bank has rejected your loan application.
The bank has declined the application
A subcontractor applies for working capital to fund several upcoming jobs. The bank declines the application without a detailed explanation. Another lender offers faster approval at a higher cost. Before applying again, the owner needs to understand whether the issue is missing information, the requested facility or the business’s ability to repay.
Ask for the reason and evidence needed
Request the bank’s explanation and ask whether corrected information or a different proposal could be considered. Reconcile the application with current financial statements, tax information and bank records. Do not submit inconsistent figures to the next lender.
A declined application does not by itself prove that the business is insolvent. It also does not show the bank was wrong. Treat it as a prompt to examine the actual repayment capacity and the assumptions behind the funding request.
Check the purpose of the money
Separate funding a profitable job from paying recurring losses. Show when the money is needed, what it buys and which receipt is expected to repay it. Confirm the customer’s payment conditions and the remaining delivery costs.
Prepare a forecast with delays and cost overruns included. Business.gov.au recommends cash planning to identify funding gaps. A large order can increase the shortage if the business must fund materials and wages long before collecting payment.
Compare complete offers
For any alternative, obtain the total cost, repayment schedule, security and guarantee terms. Compare cash left after repayments, not only the amount advanced. Ask an appropriate adviser to review unusual or significant obligations.
Avoid assuming that quick approval is an endorsement of the business plan. If the terms require a repayment pattern the business cannot meet, the offer is not a practical solution even if it clears old bills immediately.
Choose the next action deliberately
Options may include revising the funding request, changing job timing by agreement, collecting receivables or seeking creditor arrangements. Check contractual obligations before altering delivery commitments.
If the business cannot meet debts generally, obtain a solvency review rather than continuing applications indefinitely. Set a decision date tied to the actual operating need. Preserve the application, response and revised forecast so advisers can assess the same evidence.
Find the reason and choose the next route
Ask why the application was declined.
Correct any inconsistencies in the supporting information.
Test the funding purpose and full repayments.
Choose a revised funding or business plan before the cash deadline.
Call CRP today about a rejected business finance application and coordinating a practical review of your options.