Have You Been Turned Down For Business Credit? Remember – It’s Not Personal.

By | October 11, 2021

In an earlier post, I went over Crest Capital’s basic credit requirements. Two years in business, sufficient revenues, no bankruptcies, etc. 

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Like any lender, our credit requirements will leave out many businesses. And over the years, I’ve received more than one angry email from someone turned down, trying to explain why they had to declare bankruptcy three years ago, or why revenues fell the last two years.

And I want to take a few minutes to reiterate that a “no” for business credit is not personal – it’s made by numbers and data, and nothing more. And they are made without exception.

In other words, when we say “two years in business”, it’s two full years, to the day. 

When we say “no bankruptcies in the last seven years”, it’s the full seven years. Nothing else is taken into consideration (that’s why the reasons behind the bankruptcy won’t matter). 

Part of the reason for these absolute lines in the sand is there’s really no other way for a business to offer credit these days. Every lender has to have criteria to fit their rate and loan structure, and they have to follow their criteria exactly.  

This is why it’s simply criteria based, and not personal. 

I liken this to what has happened with asking for ID when purchasing alcohol. I have noticed these days that many stores ID everyone who isn’t an obvious octogenarian – no exceptions. Even a 50-year old is asked for ID. Why do stores do that? To make the ID process universal. No more relying on the cashier to determine if the person “looks” old enough. Because that comes with issues – I’ve seen 18-year-olds that could easily pass for 30+. Asking everyone for ID takes that situation (and the booze) off the table. It’s not personal – it’s a policy. 

The good news is, there are lenders for everyone. There are lenders for specific, higher-turnover industries. There are lenders for newly-minted businesses. And there are lenders, like Crest Capital, for successful businesses who wish to grow. 

But in the end, the credit decision is all business, and not personal. And “time” can also eventually turn a no into a yes. Passing two years in business is big. Having a bankruptcy pass the seven-year mark is excellent. And so on.

So remember, a credit “no” is not personal. We’ve funded people who we initially said no to, then said yes to a few years later.

On the other side of the coin, if you’ve demonstrated years in business, solid revenues, and have good credit, take a bow. We’ll talk about that the next blog.   

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