Rejected! That’s one word no one wants to see or hear in response to a bank loan that they have applied for.

It doesn’t matter how well the P.R. guys try to make those words look appealing; they never are. So, what can you do to ensure that your next application won’t have that word embedded somewhere in the response you get?


First of all, what are the hurdles that come with trying to get a loan? And, just how can you overcome them in your next application?

bank loan

Bad Credit/No Credit

Your credit score determines your creditworthiness. Before the bank offers you a loan, they have to look at both your credit score and your business credit score. If you’re low or have none at all, the bank will be reluctant to offer you the loan. 


You can overcome this particular hurdle by ensuring you make your payments on time. Also, ensure that your credit accounts remain open after you’ve paid for reference.

Lack of Preparation

Lack of preparation can amount to several things when trying to get a bank loan.  The major two are the following.

  • Not filling out the application form well. This can be because you didn’t fill the form truthfully or because you left some essential parts unanswered.
  • Knowing how much to ask for. This can be either because you don’t know how much you want for whatever you’re requesting the loan for or because you overvalued. Any of these two will get you rejected.

To be able to ensure you’re prepared for the loan process, do enough research so that you’re ready. And, you should fill out your form entirely.  


No Steady Cash Flow

If you have no steady flow of cash or if the bank doesn’t trust your flow of money, then you’ll be denied your loan. Banks generally are scared of putting their money in black holes. If you can’t prove that the amount will be paid when the time comes, why should they give you the loan?

You can overcome this by asking for an SBA loan if it’s for a startup business since the government guarantees those. For a personal loan, come prepared with your collateral in hand and with a steady flow of cash. The cash flow can be from your business or your paycheck.

Under Capitalization

This is where your collateral now comes into play. Never come before your lender with the wrong collateral or under the value of the loan you’re applying for. In case you don’t meet your obligations; the bank will sell off your collateral to cover their expenses. This hurdle can be overcome by doing enough research and coming up with something that banks generally want as collateral.


A rejection letter from your bank for that loan can break your heart, but don’t sweat it. Unless you’re neck-deep in debt, your loan can be approved on your next try if you fix your wrong moves. These were just a few of the hurdles you are generally going to meet when applying for a bank loan.