Can I Get a Business Loan If I Have Been Refused by My Bank?
Finn Murphy
Relationship Manager · Jun 23, 2024 · 6 min read
A bank refusal does not mean your business cannot borrow. It means the specific bank you approached could not lend to you under its specific criteria at that time. The specialist lending market operates on entirely different criteria and has products designed for exactly the situations that high street banks decline.
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Why banks decline and what it means
High street banks apply relatively conservative, automated lending criteria. They lend primarily to businesses with at least 2 years of banking history with them, clean credit, consistent revenue, and established sectors. Businesses that fall outside these parameters are declined algorithmically before a human reviewer ever sees the application. This is not a judgement on the business's viability; it is the bank's risk appetite.
Being refused by a bank does not affect your credit score negatively in most cases (provided it resulted from a soft search at the eligibility stage). It also does not prevent you from approaching other lenders. The key is to understand why the bank declined so you can identify which alternative lenders are likely to be more favourable.
What to do after a bank refusal
Request a reason for the decline if the bank will provide one. This helps identify whether the issue was credit history, trading history, revenue, sector, or something specific to the bank's current appetite. Knowing the reason helps a broker direct your application to the right specialist lenders.
Approach a whole-of-market broker with a full panel of specialist lenders. Many of the 100+ lenders on the Spark Finance panel specifically target applications that mainstream banks decline. They have different risk models, different sector appetites, and different criteria for credit history. What a bank declines on Monday can be approved by a specialist lender on Tuesday.
"A bank refusal is the start of the search, not the end of it. The specialist lending market exists because the banks cannot, or will not, serve every creditworthy business."
- Finn Murphy, Relationship Manager
Frequently Asked Questions
Should I apply to multiple banks after being refused?
Each full application triggers a hard credit search. Multiple hard searches in quick succession can lower your credit score. A broker can approach multiple lenders simultaneously using a single packaged application, avoiding multiple hard searches and improving your chances without the credit impact.
The bottom line
Spark Finance works across 100+ lenders including those that specialise in applications declined by high street banks. Start at apply.sparkfinance.co.uk.
Check your eligibilityAbout the author
Finn Murphy
Relationship Manager
Finn is a Relationship Manager at Spark Finance focused on asset finance and equipment funding for UK businesses. He has placed hire purchase, finance lease, and operating lease facilities across construction, healthcare, and manufacturing sectors.
