The short answer
Ask the lender for its specific reasons in writing. For a business with $1 million or less in revenue, Regulation B gives you the reasons, or the right to them: ask within 60 days and they are due within 30. Then read the reasons as a constraint: cash flow, collateral, time in business, equity, size or appetite. Each has its own fixes, and a second lender, an SBA guaranty or a smaller structure can change the answer.
Ask for the reasons
Ask for them in writing and keep a copy. The rule is Regulation B, 12 CFR 1002.9, and it sorts business borrowers by size.
What Regulation B requires after a business credit decision
| Your revenue in the last fiscal year | The decision notice | The reasons |
|---|---|---|
| $1 million or less | Within 30 days after the lender has a completed credit request. The decision itself may be stated orally or in writing | The specific reasons, or notice of your right to them. If you ask within 60 days, the reasons are due within 30 days. The notice of your right, with the Equal Credit Opportunity Act statement, may be given when you make the request |
| More than $1 million | Within a reasonable time, orally or in writing | Written reasons, with the same statement, if you ask in writing within 60 days |
Trade credit and factoring go in the second row whatever the revenue. This is the same rule as the three-question page, which you can use to see who has made loans like yours.
Five more points from the rule text:
- The reasons must be specific. Saying the decision rested on the lender’s internal standards or policies, or that you failed to reach a qualifying score, does not meet the rule.
- A counteroffer you do not accept counts. If the lender offers a different amount or terms and you do not use or accept it, the lender has 90 days from the counteroffer to send the notice.
- An incomplete file is not a decline. Within 30 days the lender must either decide or tell you in writing what is missing and how long you have to send it.
- Some refusals are outside the rule. A refusal because the lender does not offer the type of credit you asked for is not adverse action under the rule’s definitions, so a “we don’t make that kind of loan” may come with no reasons. It tells you the lender’s appetite.
- A very small lender can notify orally. A creditor that took no more than 150 credit requests in the prior calendar year can meet the notice rules by oral notice.
If a broker sent your package to several lenders and none offered credit, each lender that said no still owes the notice, directly or through the broker, and the notice names the lender it comes from.
Read the reasons as a constraint
A no is information about a constraint. SBA’s own list is a good map, because it names the gaps that make a loan eligible for the guaranty: a term longer than the lender’s policy allows, a loan above the lender’s limit for one customer, collateral outside policy, a policy that does not allow new businesses (two years or less) or the borrower’s industry, and other credit factors such as history, experience, debt relative to net worth, global cash flow and loan size relative to the age of the business.
A decline read as a constraint
| What you heard | The constraint | What can change it |
|---|---|---|
| Cash flow is thin for the payment | Repayment capacity | A smaller loan, a longer term, a lower payment, more cash flow. SBA’s floor is 1.15 on a Standard 7(a) loan |
| Collateral is short | Security | More collateral or a guarantor, an SBA guaranty (SBA’s rule is that a request must not be declined only for collateral), a participation that cuts the lender’s share |
| Too new | Time in business | SBA treats two years or less as a new business and one year or less as a start-up, with 10 percent equity |
| Not enough cash in | Equity | More owner cash; seller debt on full standby can count in part for a business purchase |
| Too large or too small | The lender’s limit or minimum | A participation, a second lender, a lender that works at your size |
| Not our kind of loan | Appetite | Another lender, or another lane |
| A score or credit history | A stated reason | Ask for the principal reasons. This site gives no advice on scores |
Worked example (hypothetical). A bakery asks for a loan with payments of $115,000 a year. Cash flow available for debt service is $120,000, so coverage is $120,000 divided by $115,000, or 1.04. At SBA’s 1.15 floor the payments could be at most $120,000 divided by 1.15, or $104,348 a year. A smaller loan or a longer term gets there. Now the collateral: the bakery asks for $400,000, owns used equipment with a net book value of $60,000 and no real estate. SBA counts used equipment at 50 percent of book, $30,000, against a $400,000 loan. SBA’s rule is that a request must not be declined only for collateral, and the lender takes available equity in the owners’ other real estate if it has at least 25 percent equity. At a 75 percent guaranty the lender’s unguaranteed share is $100,000, not $400,000. The guaranty fee is 3% of the $300,000 guaranteed portion, $9,000, which the lender may pass on. The cash flow test still applies.
Looking for a lender now? Find lenders for this in your state or see SBA 7(a) lenders state by state.
What can change the answer
- A different structure. Amount, term, amortization, collateral, guarantors and cash in are all levers. Under SBA’s rules real estate can run up to 25 years, equipment 10 or 15, and working capital 10.
- A second lender. A decline is one lender’s answer. The public record shows who has made loans like yours. For restaurants in Ohio, over Oct 2023 through Sep 2026, 90 lenders made 870 SBA FOIA, SBA 7(a) loans.
- An SBA guaranty. It can cut the lender’s unguaranteed share to as little as 25 percent of a loan above $150,000 and 15 percent at or below, but SBA still requires repayment from cash flow, and the lender must show why the credit is not available elsewhere. A score policy alone is not enough to show that. See which program fits.
- A participation. Another lender takes part of the loan, which can get a large loan under the first lender’s limit. See how participations work.
- A different lane. A credit union business lender, an equipment lender, a line of credit or a microloan answers a different need.
- SBA reconsideration. If SBA itself declined a request the lender sent, the lender can ask SBA to reconsider within six months, explaining how each reason was overcome. After 120 days the file needs current financials.
Free help
SBDC. SBA’s resource partners include Small Business Development Centers, which provide counseling and training.
SCORE. SBA says SCORE mentors give advice at no cost by email, phone and video.
CDFIs. The CDFI Fund certifies specialized lenders that serve low-income communities and people who lack access to financing, including community development banks, credit unions and loan funds. It publishes the list of certified CDFIs.
SBA Lender Match. A short questionnaire. SBA says it returns a summary of interested lenders within two business days and that more than 800 lenders take part. It promises no lender response and no loan.
Microloans. SBA microloans run up to $50,000 through nonprofit intermediaries. SBA says the average is about $13,000, the longest term is seven years, and rates vary by intermediary, generally 8 to 13 percent. Proceeds cannot pay existing debt or buy real estate.
What to watch for
- Upfront fees. SBA bars an agent from a contingency fee or a flat fee charged to every client, and requires the work behind any fee over $2,500 to be documented. Agent fees are disclosed to SBA on Form 159. A lender may not charge a borrower commitment, origination, broker, referral or similar fees, or points. It can charge out-of-pocket costs such as an appraisal, itemized. A 504 development company may take a deposit of the smaller of $2,500 or 1 percent of the net debenture, refundable within 10 business days if declined. Ask what any fee is for, who receives it and when, in writing. Legitimate lenders here will not ask you to pay through this site.
- Daily or weekly withdrawals. A merchant cash advance and similar sales-based repayment agreements are repaid out of your sales, often by daily or weekly withdrawals. Ask for the total dollars to be repaid and the annual rate before you sign. It also matters to a later SBA loan: a 7(a) loan can refinance one only after it has been converted to a term loan and has amortized for at least 24 months with no new agreement since. An active one is not eligible.
- Stacking. Taking a second advance to cover the first. Ask the new funder whether it will pay off the old one, and read the first contract for limits.
- Confessions of judgment. A clause that lets a funder win a court judgment without a hearing. Have a lawyer read any contract that has one.
What the public record can and cannot tell you
The SBA files list loans that were made. They hold no declines, no reasons and no appetite today. Use them to find lenders that have made loans of your size, industry and state, then ask each what it would need.
What this guide does not promise
No step here predicts a yes. Regulation B gives you the reasons, not the loan.
Terms used here
- SBA Lender Match: An SBA online tool where a business answers a few questions and SBA sends a summary of interested lenders within two business days. It is not a loan request and promises no loan.
- Credit elsewhere test (SBA): SBA's rule that a loan is eligible only if the business cannot get some or all of the money on reasonable terms elsewhere. The lender must certify it and explain why in its credit memo.
- SBA guaranty percentage: The share of a 7(a) loan that SBA guarantees to the lender: up to 85 percent of a loan of $150,000 or less, up to 75 percent of a larger loan, and 50 percent on SBA Express.
- Equity injection (SBA): The cash or other equity an owner puts into an SBA-financed project. A 7(a) start-up or business purchase needs at least 10 percent of total project cost; a 504 project needs 10, 15 or 20 percent.
- SBA agent (packager, referral agent or broker): Anyone who represents an applicant or a lender in dealings with SBA for pay: an attorney, accountant, consultant, packager or broker. SBA does not require a borrower to use one.
- Upfront guaranty fee (SBA 7(a)): The one-time fee a 7(a) lender pays SBA for its guaranty, set by loan size and charged on the guaranteed portion. The lender may pass it on to the borrower.
Sources
Every rule and outside figure above comes from one of these, opened on . Dates are the source's own. Figures from this site's data carry their own source and date beside them.
- 12 CFR 1002.9, notifications (Regulation B), retrieved .
- 12 CFR 1002.2, definitions (Regulation B), retrieved .
- SBA SOP 50 10 8.1, Lender and Development Company Loan Programs (Section A, Chapters 1, 4 and 5; Section B, Chapters 1 and 2; Appendices 14, 17, 19 and 20), effective .
- 13 CFR 120.193, reconsideration after denial, retrieved .
- SBA microloans, retrieved .
- SBA Lender Match, retrieved .
- SBA resource partners: Small Business Development Centers and SCORE, retrieved .
- CDFI Fund, CDFI certification, retrieved .
Next step: check the record
- A bank said no: three questionsPick your kind of business, state and rough amount. It shows who has made SBA loans like yours. Nothing is saved.
- Loan Comps for the 7(a) example in this guideRestaurants in Ohio at $400,000 is the example below. Change the industry, state and amount to yours.
- SBA 7(a) lendersThe national list of lenders that made 7(a) loans, with the method printed above the table.
Keep reading
- DSCR calculator: Cash flow over debt service. Type the cash flow and the loan terms, see the ratio and the cushion before it falls to 1.00x.
- How to place a commercial loan with a bank: A bank loan moves through the same stages every time. Knowing them tells you what the bank needs at each point, what its answer means, and where time is lost.
- How to pick banks for a deal with public data: Public filings cannot tell you which bank will say yes. They can tell you which banks are large enough, already hold loans like yours and lend where the property is. That is enough to turn four thousand banks into six phone calls.
- SBA 7(a) or 504: which fits your loan: Both are SBA loans, and they work differently. The choice usually turns on what you are buying and how much cash you can put in.
- SBA 7(a) loan package checklist: A 7(a) package is the bank's usual file plus SBA's own list. Know which items SBA requires and you can have them ready before the first call.
- How a loan broker works with community banks: A community bank will take a good loan from a broker it trusts. Trust comes from three things: the bank knows who is paying you, your packages are accurate, and you bring loans that fit what the bank does.
Questions people ask
How long does a bank have to tell me why it said no?
Regulation B has the lender notify you of its decision within 30 days after it has a completed credit request. For a business with $1 million or less in revenue last year, the notice gives the specific reasons or your right to them. If you ask within 60 days, the reasons are due within 30 days of your request.
Can I be told no with no reason at all?
Not when the rule applies. A reason must be specific. A statement that the decision rested on internal policy, or on a failure to reach a qualifying score, is not enough. A refusal because the lender does not offer that kind of credit is outside the rule's definition of adverse action.
Cite this
Source: The Lender Report, What to do after a bank says no to a business loan, https://lender.report/guides/what-to-do-after-a-bank-says-no/, data as of November 9, 2026.
General information, not legal, tax or credit advice. A lender's own policy decides what it will do; ask it for the policy in writing.
SBA does not require you to use an agent or broker for a loan application. SBA has not reviewed or endorsed this site.
Source and date appear beside each figure. Banks report balances, not loans made. Loans made come only from HMDA and SBA files. We do not audit filings and can make errors joining them. Report a problem