funding4business – why small business loan applications are rejected

Why small business loans are rejected

A comprehensive study done by the Graziadio School of Business & Management at the Pepperdine University in the USA, confirmed that:-

Approximately 29% of  small business loan applications were declined due to poor   quality of earnings and/or cash flow, and

Approximately 23% were declined due to insufficient collateral.

The complete breakdown of loan application rejection is as follows:-

Quality of earnings and/or cash flow 29%
Insufficient collateral   23%
Debt load   13%
Size of company   6%
Customer concentrations   6%
Insufficient credit   5%
Size or availability of personal guarantees 4%
Insufficient operating history   4%
Economic concerns   4%
Insufficient management team   3%
Weakening  industry   2%
Other   2%