Find out why a lender would say no, before one does
Six questions. You get the most likely reason a business lender would decline you, what fixes it and how long the fix takes. If nothing stands in your way, we'll say that too.
Question 1 of 6
What lenders actually read
Non-bank business lenders decide mostly on your bank statements, not your tax return. These are the six things that decide most applications through our lending network, in roughly the order they matter.
1.Bounced repayments to another lender
Lenders read your last six months of business bank statements line by line. A dishonoured repayment to another finance provider is the strongest warning sign they can see, because it shows the exact behaviour they are trying to avoid. It can outweigh strong revenue entirely. Bounced bills or supplier payments matter less, but expect to explain them.
2.Money through the business account
Repayments are sized against what actually lands in your business account each month, not what the business turns over on paper. Lenders in our network look for $10,000 or more a month, consistently. Below about $7,000 there is usually no loan the numbers can support. Cash that never reaches the account does not exist as far as a lender is concerned.
3.Trading history
We refer businesses trading 12 months or more, because that is when the bank statements start to show a reliable pattern. Some lenders will look at newer businesses, but options are fewer and cost more.
4.ATO debt
Tax debt on a payment plan that is being paid on time is often workable: it shows the debt is managed. Tax debt with no plan usually is not, because the ATO can take action that puts it ahead of every other creditor.
5.Your credit file
Non-bank lenders weigh banking more heavily than a credit score, so old defaults that are now paid are often workable. Unpaid defaults and court judgments narrow options sharply. A current bankruptcy, liquidation or administration rules out new credit until it ends.
6.Loan size
Lenders in our network start at $10,000. Under that, a business credit card or an overdraft from your own bank is usually the quicker and cheaper tool.
These rules come from the criteria our lending partners apply and from the reasons applications through Avoir have fallen over. They describe what usually happens, not a promise about any one lender. Read more on business loans with bad credit, loans with ATO debt and loans without financials.
Declined business loans, answered
Why was my business loan declined?
The most common reasons are dishonoured repayments to another lender in the last six months, revenue through the business account below about $7,000 to $10,000 a month, under 12 months of trading, ATO debt without a payment plan, and unpaid defaults or court judgments. The Decline Decoder checks each of these and tells you which applies.
Does applying again after a decline hurt my credit?
Each full application can leave an enquiry on your credit file, and several in a short time can make the next lender more cautious. That is why it is worth fixing the reason for a decline before applying again rather than applying to lender after lender.
How long do dishonours affect a business loan application?
Non-bank lenders typically assess the last six months of business bank statements, and can ask for 12 months on larger loans, so a dishonour usually stops counting against you once it falls outside that window. Keeping every finance repayment clean from today is the fix.
Can I get a business loan with ATO debt?
Often, if the debt is on a payment plan and the payments are up to date. Unmanaged ATO debt with no plan usually rules an application out until a plan is in place.
Is the Decline Decoder a credit check?
No. It asks six questions and runs entirely in your browser. Nothing you enter is stored or sent anywhere, and it does not touch your credit file.
avoir.com.au is operated by Avoir Finance Pty Ltd (ABN 56 703 388 201). Avoir connects businesses with lenders through its licensed broker partner. Avoir is not a lender and does not provide credit or financial advice.