Why was I denied credit or a loan?

One of the biggest challenges facing small businesses is access to mainstream credit, which can not only be extremely frustrating, but also prevents a business from growing. If you have ever been rejected for credit, this can be primarily due to:

  • A lack of commercial credit history
  • Negative or inaccurate information on your business credit report

More often than not, credit providers are unable to adequately assess and price SME risk. In the first instance, this process is often made more difficult for lenders by a lack of commercial credit history for many unincorporated entities such as sole traders, whose commercial history is essentially the same as their personal credit history. This happens when business owners use their own personal finances to fund business operations.

As a result, lenders look at your personal or consumer credit history when assessing your loan application - a marred report can significantly impact your chances of successfully applying for credit. D&B suggests checking your credit report to determine the reasons for rejection - this can include defaults, court judgements, bankruptcy or multiple enquiries. By checking your report you can see how you are being portrayed to credit providers and take measures to correct any inaccuracies.

If you are an incorporated small business, what is on your business credit report can similarly affect your loan outcome. You can check your business credit report here >>

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