Quick answer
If a bank or another lender has declined your business loan, say so on your next call: who declined, when, the reason they gave, and anything that's changed since. Banks tell small business customers the general reason for a decline under their code of practice. That reason helps the specialist avoid lenders with the same policy and focus on ones that look at your situation differently.
Key points
- Say who declined, when, and the reason they gave.
- Ask the bank for its reason if you don't know it.
- Different lenders have different policies; a decline isn't a verdict on your business.
- Avoid a string of rapid applications, which add enquiries to your credit file.
A “no” from one lender isn’t a “no” from all of them
Being declined stings, especially when it’s the bank you’ve used for years. But a decline usually tells you more about the lender’s policy than about your business. Banks have fixed boxes: minimum trading periods, industry lists, credit scoring thresholds, security requirements. Fall outside one and the answer is no, even if the business is sound.
Non-bank and private lenders draw their boxes differently. Some weigh property security more heavily than credit scores. Some are comfortable with newer businesses, ATO debt or seasonal income. That’s why a decline from one lender is worth mentioning on the next call, not hiding.
What to say
Give the specialist four things:
- Who declined. A major bank, a smaller lender, an online lender.
- When. Roughly how long ago.
- The reason they gave. Even if it was vague.
- What’s changed since, if anything. More trading history, a debt paid off, BAS caught up.
Scripts you can adapt
“I applied with my bank last month for about $150k and was declined. They said it was because we’ve only been trading fourteen months and their minimum is two years. Nothing’s changed since, but we’ve had two strong months.”
Illustrative example only.
“An online lender said no a couple of weeks ago. They didn’t say much, just that we didn’t meet their criteria. I think it was the ATO debt, about $60k, which I didn’t mention on their form.”
Illustrative example only.
“The bank declined our application to refinance. The reason was our industry: they’ve tightened lending to hospitality. We own the freehold of our venue.”
Illustrative example only.
Each version tells the specialist which door has already been tried and why, so they can open a different one.
If you don’t know the reason, ask
Many people are declined and never find out why. It’s worth asking. Under the Banking Code of Practice, banks that subscribe to it commit to telling small business customers the general reason they declined a loan, unless it’s reasonable not to. The current code took effect on 28 February 2025.
A short call or email to your bank asking for the reason is enough. Our guide on asking your bank why it declined includes a script.
Common decline reasons, and what they often mean elsewhere
| Reason the bank gave | What it can mean on your next call |
|---|---|
| Not enough trading history | Property-secured options may be more flexible; see newer businesses |
| Credit history | Lenders that assess case by case; see past credit problems |
| ATO debt | Some lenders consider it, especially with a plan or security |
| Industry policy | Other lenders may not share the same exclusion |
| Not enough security | Second mortgages or caveats may use equity the bank didn’t |
| Serviceability | The amount or term may need rethinking |
None of these are guarantees. They’re the kinds of differences that make it worth a second conversation.
Don’t fire off applications everywhere
After a decline, the temptation is to apply online with three or four other lenders the same afternoon. Resist it. Each formal application can be recorded as a credit enquiry, and a cluster of recent enquiries can itself make lenders cautious. Credit enquiry information can stay on a credit report for five years.
A better approach: have one conversation where the specialist hears the full story, then apply once, with the lender most likely to say yes. There’s no credit check at our enquiry stage, so talking to us first doesn’t add to the pile.
When “not yet” is the honest answer
Sometimes the right move is to wait: lodge the outstanding BAS, build a few more months of statements, pay down a debt. If that’s the case, the specialist will tell you, and tell you roughly what would change the answer. That’s more useful than another decline.
If you have property, it’s worth reading how to describe property as security before you ring, because it can open options the bank didn’t consider.
What to have ready for the second conversation
A decline often leaves you with paperwork already gathered, which is useful. Before you ring, pull together:
- The decline itself: the date, the lender, and the reason in their words. An email is ideal.
- What you applied for: the amount, term, purpose and any security offered. If the next conversation is going to change something, it helps to know exactly what the starting point was.
- Anything that’s changed: an extra month of statements, a lodged BAS, a debt paid down, a signed contract.
- Property details, if you have property and didn’t offer it the first time.
It also helps to be honest with yourself about whether the first application was a good fit. Some declines are simply a mismatch: a bank asked for an unsecured loan that only made sense with security, or a two-year minimum applied to a business with fourteen months of trading. Others point to something that needs fixing first. A specialist can usually tell the difference quickly, and will say so.
If you’re still not sure what the first lender was looking at, our list of questions a specialist asks mirrors what most lenders want to know. Running through it before the call is a good way to spot what might have tripped the first application.
Ready for a second opinion?
Ring 03 4059 1829 and tell us who said no and why. Or send the 60-second enquiry and mention the decline. There’s no credit check when you first enquire, your details aren’t scattered across more lenders, and a real person looks for the lender whose policy fits. Please describe the decline accurately, because that’s what helps us avoid a repeat and find a better match.
Frequently asked questions
Can I get a business loan after being declined by my bank?
Often, yes. Banks decline for their own policy reasons, such as trading history, industry, credit history or security. Non-bank and private lenders look at different things, including property security and recent trading.
Should I tell the next lender I was declined?
Yes. The reason for the decline is valuable information. It helps the specialist avoid lenders with the same policy and saves you another decline.
How do I find out why my bank said no?
Ask. Under the Banking Code of Practice, banks that have signed up to it tell small business customers the general reason they declined a loan, unless it's reasonable not to.
Does a decline show on my credit report?
The decline itself isn't usually listed, but each credit application can be recorded as an enquiry. That's why several quick applications in a row can look worse than one well-matched one.
Will you check my credit before telling me if you can help?
No. There's no credit check when you first enquire. We talk through your situation first, and a check only happens later if you choose to go ahead.