Securing commercial finance is often essential for business growth, but not all applications are successful. When deciding whether to lend, banks assess several factors to determine the risk level and the business’s ability to repay the loan. Any red flags can lead to rejection.
Understanding the barriers to finance can help you improve your chances of approval. The recent annual impact report from the National Association of Commercial Finance Brokers (NACFB) provides valuable insight.
NACFB members who participated in the report highlighted a strong focus on risk mitigation, with sector risk and poor credit history being the most cited reasons for declined applications:
Stricter lending criteria and declining appetite for specific sectors played a significant role in limiting finance availability:
Financial health concerns also influenced lending decisions:
With often much at stake, it pays to use an expert to help you secure finance. A commercial finance broker knows the pitfalls, who to approach and how best to structure a funding application, dramatically increasing your chance of success. The NACFB report found that 20% of new clients secured funding through an NACFB member after being rejected elsewhere.
Just imagine the success rate if they’d used a broker the first time!
If you need commercial finance and want the right answer the first time around, get in touch. With a nationwide team, we’ve got a local finance expert ready to help you secure the funding you need.
