Whether you are applying for a business line of credit, business equipment financing or just a checking account, financing in business can be a headache for an entrepreneur. And with banking and credit institutions becoming strict by the day, you may wonder what the tips are to get that loan you want. Well, here are common reasons why your business loan was declined at the bank.

Poor Credit Score

An essential factor to get a loan is your credit. You are thoroughly vetted during the application process, and you need to maintain an excellent rating to get a loan. However, a bad credit experience can be avoided with proper credit maintenance. Your FICO score can be requested at the credit bureau although this will vary depending on the lender. Additionally, the type of loan you may need is determined by your credit score. Banks such as LCNB National offering a variety of loans for commercial real estate, construction, and business equipment. Whenever you’re seeking a loan, have a clear reason on what you intend to do with the money.

Limited Cash Flow

The amount of cash you have at hand ultimately affects how you pay back a loan. As a business owner, it helps determine whether you can afford a mortgage. If you have significant cash flow problems, you may experience difficulty getting loans from traditional financing options. Some companies, such as LCNB National Bank, know that one preventive measure would be to calculate the cash flow in your business at least quarterly.


As a startup, lending can be an uphill task. Young businesses tend to have the hardest time in securing business loans due to their insufficient history. At times, lenders get nothing at all. If the age of your business is less than a year, you are much better off seeking a non-traditional financing option such as an online lender, angel investors or venture capitalists.

Don’t Lack a Plan

To succeed in business, you have to get a good finance plan. Banks are wise on requiring business owners have an organized, quantitative and detailed idea to process your loan. Small-time entrepreneurs often tend to overlook the need for a formal plan. This is a way to explain what you intend to do with the money you want to borrow. Always have a detailed account of your past finance transactions to avoid getting rejected.

If you are a crossroad with a declined loan and you still need working capital, there are professional banking institutions that can offer a helping hand.