Why was my business financing application declined?
The most common reasons in Canada are existing debt service consuming too much of deposits, a declining revenue trend, chronic NSFs or negative days, insufficient time in business, and undisclosed existing positions. Personal credit is rarely the sole cause outside the banks.
Start an applicationRank the causes by how often they actually decide files. Total debt service above roughly 20% of deposits is first — a business already committed to that much cannot absorb another debit. A declining trend is second, because funders size from recent months rather than the average. Chronic NSFs and negative days are third, since they speak directly to whether a daily debit can clear.
Time in business and industry come next. Most non-bank products want at least six months of operating history, with pricing improving materially at twelve and twenty-four. Certain industries are restricted at particular funders for reasons unrelated to the individual file, which is why the same application can be declined in one place and approved in another.
A decline at one funder is information, not a verdict — but only if the reason is known. Ask for it specifically, then decide whether the answer is a different funder, a different product, or a few months of cleaning up the account first. A file declined for debt service will be declined everywhere until the structure changes.
What happens, in order
- Application — under ten minutes, no fee, no credit impact
- Documents — six months of business bank statements is the standard request
- Lender review — the file is matched to the products it actually qualifies for
- Funding — 24 to 72 hours for working capital once a structure is signed