You are in a large group
The Federal Reserve surveys small employers about credit every year. In the 12 months before fall 2025:
- 42% of applicants received everything they asked for.
- 36% received some or most of it.
- 22% received nothing.
More than half of applicants walked away short. A denial says your file did not fit that lender’s box on that day. It does not say your business cannot be financed.
Step 1: get the reason in writing
Do not guess. Ask.
Federal rules under the Equal Credit Opportunity Act give you the right to know:
- Businesses with $1 million or less in revenue. The lender must tell you its decision within 30 days of a completed application. You can request the specific reasons within 60 days of that notice.
- Larger businesses. The lender must tell you within a reasonable time. Ask in writing within 60 days and it must give you the reasons in writing.
Send a short written request to your banker. Keep the answer. Every later step depends on it.
Step 2: match the reason to a path
The most common reasons denied applicants reported in the Federal Reserve’s 2024 survey:
| Reason given | Share of denied applicants |
|---|---|
| Lender’s requirements were too strict | 43% |
| Too much debt already | 41% |
| Lender does not finance businesses like theirs | 31% |
| Insufficient collateral | 29% |
| Low credit score | 29% |
| Weak sales | 27% |
Applicants could pick more than one. Here is where each reason points.
| Your reason | What it means | Where to look |
|---|---|---|
| Too much debt | Payments already take too large a share of revenue | Pay down or refinance first. New debt on top makes the next denial certain. |
| Low credit score | You are under the bank’s line, which is often in the high 600s. Lenders in our marketplace start at 600 | Financing that weighs revenue or customers: a revenue-based offer, invoice factoring |
| Not enough collateral | The bank wanted hard assets you do not have | Equipment financing, where the equipment is the collateral; unsecured short-term loans; or, if you own a home with equity, a Business HELOC |
| Weak or uneven sales | Your cash flow did not cover the payment with room to spare | A smaller amount, a line of credit you draw only when needed, or wait for stronger months |
| Too new | Under the bank’s time-in-business line | Invoice factoring, purchase order financing, a Business HELOC (it does not look at time in business), SBA microloans, community development lenders |
| Wrong industry | The bank’s policy, not your numbers | Lenders that specialize in your industry |
If your reason was debt or weak sales, be careful. Those are the two cases where more financing can make things worse.
Step 3: weigh speed against cost
Banks are the cheapest and the hardest. In the 2025 survey, applicants at small banks were fully approved 57% of the time, the best of any lender type. If a large bank turned you down, a community bank with a relationship is worth one more try.
Online and specialty lenders say yes more often and decide in days. You pay for that. In the same survey:
- 60% of online lender borrowers said their costs came in higher than expected.
- 37% of small bank borrowers said the same.
So compare every offer on two numbers before you sign: the total you will repay, and the APR. A factor rate of 1.30 is not 30% interest. Our factor rate vs APR guide explains why, and the calculator does the math.
Three mistakes that make it worse
- Applying everywhere at once. Each hard inquiry can cost you points, and lenders see the other inquiries.
- Stacking advances. A second and third advance on top of the first is how a cash flow gap becomes a crisis.
- Borrowing to cover losses. Financing buys time. If nothing changes during that time, you end up with the same problem and a payment.
When to go back to the bank
Go back when the reason has changed, and bring proof.
- Debt: a lower balance and a lower monthly payment.
- Credit: a higher score, and an explanation for anything old.
- Sales: three to six stronger months of statements.
- Time: your second anniversary, with two years of tax returns.
Where we fit
ExtraCredit Loans works with lenders that approve businesses banks turn down. If your numbers will not get you approved there either, we will tell you before you spend time on an application.
Start with the funding estimator to see a high-end figure, or check the requirements by product.
Sources
- Federal Reserve Banks: 2026 Report on Employer Firms, findings from the 2025 Small Business Credit Survey, published March 3, 2026. The survey uses a convenience sample of 6,525 employer firms.
- Denial reasons are from the Federal Reserve’s 2024 Small Business Credit Survey, as summarized by the Coleman Report, April 16, 2025.
- Consumer Financial Protection Bureau: Regulation B, section 1002.9, notifications