What to do when the bank says “No”

For many business owners, securing a loan from a bank is a crucial step towards growth and stability. However, there are times when, despite thorough preparations and a strong business case, the bank declines your loan application. While this can be disheartening, it’s not the end of the road. At Fifo Capital, we believe that there are numerous alternative funding solutions to explore when the bank says no. Here’s what you can do next.

Understand Why the Bank Said No

Before exploring alternative funding options, it’s essential to understand why the bank declined your loan application. Common reasons include:

  • Insufficient Credit History: Banks often look for a solid credit history as proof of reliability.
  • Lack of Collateral: Without adequate assets to secure the loan, banks might be hesitant to lend.
  • Poor Cash Flow: Demonstrating strong cash flow is crucial as it indicates your ability to repay the loan.
  • High Debt Levels: High existing debt can make lenders wary of adding more risk to your business.

Understanding the reasons behind the rejection can help you address these issues and improve your chances with other lenders.

Explore Alternative Financing Options

When traditional bank loans are not an option, several alternative financing solutions can provide the necessary funds to keep your business moving forward.

1. Invoice Financing

Invoice financing is an excellent solution for businesses with outstanding invoices. This option allows you to unlock cash tied up in unpaid invoices, providing immediate working capital. Companies like Fifo Capital offer flexible invoice financing solutions that help maintain cash flow and manage operational costs without incurring additional debt.

2. Business Lines of Credit

A business line of credit functions similarly to a credit card, offering access to a predetermined amount of funds that you can draw from as needed. This type of financing provides flexibility and can be particularly useful for managing short-term cash flow issues or unexpected expenses.

3. Asset Financing

If your funding needs are related to purchasing equipment, equipment financing might be the right choice. This type of loan uses the equipment itself as collateral, making it easier to secure than traditional loans. It also helps preserve working capital for other business needs.

Strengthen Your Financial Position

While exploring alternative funding options, it’s also crucial to work on strengthening your financial position to improve future loan applications.

1. Improve Your Credit Score

Take steps to improve your credit score by paying bills on time, reducing debt levels, and correcting any errors on your credit report. A higher credit score can significantly enhance your chances of securing a loan.

2. Build a Stronger Business Plan

A comprehensive and well-thought-out business plan demonstrates your business’s potential and can make you more attractive to lenders. Highlight your business’s strengths, market opportunities, and strategies for growth.

3. Increase Cash Flow

Focus on improving your cash flow by tightening credit terms, managing inventory efficiently, and cutting unnecessary expenses. Strong cash flow indicates your ability to manage and repay loans.

Seek Professional Advice

Navigating the world of business finance can be complex. Seeking advice from financial experts can provide valuable insights and help you identify the best funding options for your business. At Fifo Capital, we offer tailored financial solutions and expert guidance to help businesses overcome financial hurdles and achieve their goals.


A rejection from the bank doesn’t spell the end of your business’s financial aspirations. By understanding the reasons behind the decline, exploring alternative funding options, and strengthening your financial position, you can secure the necessary funds to grow and thrive. At Fifo Capital, we are dedicated to supporting businesses with innovative financial solutions and expert advice to help you succeed when the bank says no.

For more information give us a call – 0800 863 436, or email us at [email protected]. We would love to hear from you.