My bank said no. Why, and what now?
Sterling's answer A bank no usually means 'not on our terms', not 'never'. Find out which box you did not tick, because that decides whether the answer is to fix something or to go somewhere else.
Want a straight answer for your business?
See who'll fund meBanks turn down business finance for a handful of reasons: the company is too young, the affordability does not stack up, there is not enough security, or something on the credit file worries them. A bank "no" often means the request did not fit that bank's own criteria, not that no one will lend. Find out which reason applies to you, because the next step depends on it.
The usual reasons
A government consultation on the Bank Referral Scheme lists why small businesses get rejected: the age of the business, lack of collateral, insufficient cash flows and the quality of the business plan, among other risk factors. It also notes, frankly, that "ultimately some businesses will not meet lenders' standards of creditworthiness."
In plain terms:
| Reason | What it usually means | What changes the answer |
|---|---|---|
| Too young | Not enough trading history | Time, or products that need less history |
| Affordability | Repayment too big for profit | Smaller amount, longer term, different product |
| No security | Bank wanted a charge or property | Unsecured products, often with a personal guarantee |
| Credit file | CCJ, default, missed payments | Clear and satisfy it, then wait |
| Sector | Bank's appetite, not your company | A funder that works with your trade |
Ask the bank which one it was
Ring or email your relationship team and ask: "Which part of the application did not meet your criteria?" Write down the answer. If it was the credit file, check it yourself. If it was affordability, ask what amount or term would have worked.
The Bank Referral Scheme
If a designated bank declines you, it should offer to refer you. GOV.UK describes it like this: designated banks "refer SME customers that they reject for finance, with the SMEs' permission, to finance platforms that can match the SME with alternative finance providers." The same document says only about 2–3% of rejected SMEs opt for a referral. It is worth asking about. Ask Sterling is not part of that scheme.
Where a non-bank funder can help
Specialist funders often look at different things to a bank. A merchant cash advance leans on card takings. Invoice finance leans on your sales ledger. Asset finance leans on the equipment. These can work where a bank loan did not, but usually cost more per year. A cash advance at a 1.35 factor over 6 months, paid daily, is about 126% APR.
Sterling's take: going from "the bank said no" to "I'll take anything" is how owners end up with the most expensive money in the market. Know the price before you say yes.
What to do next
- Get the bank's reason in writing if you can.
- If it was a CCJ, read do CCJs stop business finance first.
- Size a sensible request with how much can I borrow.
- Read the working capital guide to match the product to the need.
Run your own numbers: How much could I borrow?
Comfortable amount, about
£102,000
Range £95,000 to £110,000 if the real price lands 50% higher or lower than your assumption.
- Room for a new repayment a month
- £10,000
- Repayment per month
- £10,000.00
- Number of repayments
- 12
Affordability, not approval. Funders set the amount from your statements and their own rules.
Ready for a straight answer?
Two minutes of questions. One funding specialist. No impact on your credit score.
Questions owners ask
Will the bank tell me why it said no?
Ask directly. Banks do not always give detailed reasons, but you can ask which part of the application fell short: trading history, affordability, security or credit.
What is the Bank Referral Scheme?
Under the scheme, designated banks refer small businesses they decline for finance, with the business's permission, to designated finance platforms that try to match them with other providers.
Is Ask Sterling part of the Bank Referral Scheme?
No. Ask Sterling is not a designated platform and has no connection to the scheme or to any government body.
Should I apply somewhere else straight away?
Only once you know the reason. If it was a CCJ or too little trading history, a second application will usually meet the same answer.