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Bank said no? Decode the reason

A decline letter is shorthand. Choose the line closest to what you were told, and see what sits behind it and which routes do not depend on it.

What did the bank say?

What "You haven't been trading long enough" usually means

The bank scores on history it can see. With under a year or two of statements it has nothing to measure repayments against, so the model returns a no regardless of how the business is going.

What you can do about it

  • Gather every month of statements you do have, even if short
  • Show contracts or repeat customers that make the next few months visible
  • Ask what trading period the bank wants, so you know when to return

Routes that do not depend on it

Read more: Funding a new business. Or tell us your situation and a person will help you match it.

What "There isn't enough security" usually means

The bank wants a registered claim it can fall back on, usually property. If you rent, or the equity is already used, the policy ends the conversation even when the cash flow looks healthy.

What you can do about it

  • List what you own outright, including vehicles and equipment, not only property
  • Check whether a guarantor or another owner could help
  • Ask whether a smaller amount would pass without extra security

Routes that do not depend on it

Read more: No property to offer. Or tell us your situation and a person will help you match it.

What "Your cash flow doesn't support the repayments" usually means

Fixed monthly repayments were judged against your average income. Seasonal or lumpy takings make the average look thin, and an unusually quiet month drags it further.

What you can do about it

  • Annotate the quiet months so the pattern is explained, not guessed
  • Compare a smaller amount or a longer term before assuming no
  • Check what regular commitments are already leaving the account

Routes that do not depend on it

Read more: Seasonal and lumpy income. Or tell us your situation and a person will help you match it.

What "Your credit file isn't good enough" usually means

A default, a judgement or a run of enquiries tripped an automatic rule. Many alternative funders weigh the asset or the trading record more heavily, so one credit event is not always the end.

What you can do about it

  • Get your own credit report and check it for errors
  • Note what happened, when, and what has changed since
  • Avoid a burst of fresh applications, which can add to the problem

Routes that do not depend on it

Read more: Credit file trouble. Or tell us your situation and a person will help you match it.

What "You owe the ATO" or "your lodgements are late" usually means

Tax debt ranks ahead of most lenders, and overdue lodgements make it impossible to verify income. Banks treat both as a stop sign until they are sorted.

What you can do about it

  • Lodge what is overdue first; it unlocks almost every other conversation
  • Set up a payment arrangement with the ATO and keep to it
  • Keep the paperwork showing the arrangement is current

Routes that do not depend on it

Read more: ATO debt and late lodgements. Or tell us your situation and a person will help you match it.

What "We can't verify your income" usually means

Sole traders and owners who draw irregularly rarely show a neat wage. The bank wanted payslips and a clean tax return; what it found was a business account with swings.

What you can do about it

  • Pull together tax returns, BAS and business statements in one pack
  • Separate personal and business spending where you can
  • Be ready to explain how the business pays you

Routes that do not depend on it

Read more: Self-employed and sole traders. Or tell us your situation and a person will help you match it.

What "It's outside our lending policy" usually means

Some industries are excluded outright because of past losses or the way the sector gets paid. It says little about your business and a lot about one lender's appetite.

What you can do about it

  • Ask whether the exclusion is the industry, the structure or the purpose
  • Describe the business by what it actually does day to day
  • Do not read one policy as a view on the whole market

Routes that do not depend on it

Read more: Alternatives to a bank loan. Or tell us your situation and a person will help you match it.

What "The amount is too small for us" usually means

Underwriting costs the same for a small facility as a large one, so many banks set a floor. You were not judged unworthy; the file simply was not worth their time.

What you can do about it

  • Look at lenders that publish smaller ranges
  • Consider whether supplier terms could cover part of the need
  • Combine a small facility with trade credit rather than stretching one loan

Routes that do not depend on it

Read more: Why banks say no. Or tell us your situation and a person will help you match it.

What "They didn't really say" usually means

Banks are not always specific, and a decline letter can be generic. The reason is usually one of the others on this page, so work backwards from what your file looks like on paper.

What you can do about it

  • Ask in writing for the main reason, and for the earliest sensible retry date
  • Lay your file next to the other reasons here and be honest about the weakest point
  • Start from what you hold instead of what the bank wanted

Routes that do not depend on it

Read more: Why banks say no. Or tell us your situation and a person will help you match it.

Why decode a decline instead of reapplying?

Most banks approve on a checklist, and a no usually means one box was left empty rather than the whole business being rejected. If you send the same file somewhere else, you will probably hit the same box. The useful move is to name the box, then choose a route that never asks about it. An invoice funder asks about your customers. An equipment financier asks about the equipment. A property-secured lender asks about equity. Different questions mean different answers.

What the decoder cannot do

It cannot see your file, judge your chances or promise anything. It sorts the reasons banks give most often and points to routes that sidestep each one. If you want help applying that to your own numbers, the Funding finder starts from what you hold and ranks the routes, and an enquiry puts your situation in front of a person who works with these routes every day.

Before you approach anyone new

  • Ask the bank for the main reason in writing, and keep it.
  • Fix the quick things first, such as overdue lodgements or an out-of-date credit report.
  • Gather the documents each route asks for, so you apply once, with a complete pack. The funding pack guide shows what goes in it.
  • Be open about the decline. Funders see it on the file anyway, and a clear explanation is easier to work with than a surprise.

Frequently asked questions

Does the decoder know why my bank actually said no?

No. It only translates the reasons banks most commonly give. If your decline letter named something else, or nothing at all, treat the closest match as a starting point and confirm the real reason with the bank.

Will a decline hurt my chances with other funders?

A decline is not a mark against you in itself. Repeated formal applications in a short time can show on a credit file, which is why it pays to match the route to your situation before applying again.

Should I go back to the bank after fixing the problem?

Sometimes. If the reason was fixable, such as late lodgements or a short trading history, ask when a fresh application would be sensible. In the meantime a route that does not rely on that point can keep the business moving.

Are the routes the decoder suggests guaranteed to work?

No. They are routes that do not depend on the specific reason you were given. Whether one is realistic depends on your documents, security and a funder's assessment.

Is anything I choose here stored or sent?

No. The decoder runs in your browser, nothing is submitted, and there is no credit check.

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