Your odds of getting a bank loan

Six or seven out of ten. That is what most directors still think their odds are, walking into the bank for a loan.

It is not true anymore.

The banks turn down 56% of small business loan applications. That is not a slow news day statistic. That is more than half. And here is the bit that will get a wry smile out of you. That is the figure the banks actually report themselves. They only count the formal declines. Not the offer that is too small or too short to actually use. Not the phone call where the manager quietly tells you it probably is not going to be a runner, before you have even filled in a form. None of that shows up in their numbers. All of it counts as a no if you are the one running the business.

Go back to 2019 and one piece of research put the real figure at 70%. Argue about the exact number if you like. The direction has not changed in six years. And honestly, right now, I think it is worse than that.

Here is the part that surprised me most. When directors get turned down and get referred on to another lender, which banks are legally required to do, almost none of them follow it up. Around two or three in every hundred. The rest just stop.

They stop because they think a no from the bank means a no from everyone. It does not. It means they went to the wrong lender, at the wrong time, probably without their application prepared in the way an underwriter actually wants to see it.

If you need finance now or in the next three months, call me first. I will make sure you are going to the right lender, one that has an appetite for your sector and your credit profile, and that your application is put together properly before it lands in front of anyone. And if you have already been turned down, do not give up. You just aimed at the wrong target.

I am Mark Smillie. 07710 466166.