After years inside credit and SME banking, we’ve read hundreds of rejected files. The letter almost always reads the same way — polite, vague, and unhelpful. The real reasons sit in the internal credit memo, which the applicant never sees.
These are the six reasons we saw most often. If your last application failed, odds are the real cause is on this list.
1. The DSCR didn’t clear the internal threshold.
Debt Service Coverage Ratio is the first arithmetic check credit runs. If the business can’t service the new loan comfortably — usually 1.25x minimum on operating cashflow — the file stalls regardless of how strong the rest looks. Banks rarely tell you your DSCR came in at 1.1x; they just say no.
2. The gearing or leverage is out of appetite.
Total debt relative to equity has limits at every bank, varying by sector. A trading company at 3x might be fine; a contractor at 3x usually isn’t. If you’re already leveraged and asking for more, credit reads it as added risk with no added buffer.
3. The CCRIS report tells a story you didn’t.
CCRIS shows every facility, every late payment, every recent enquiry. A file that looks clean on paper but shows six enquiries in 90 days signals a borrower shopping desperately around — credit treats that as a negative in itself, before anyone looks at numbers.
4. The file presentation is weak.
This is the silent killer. A technically approvable case gets declined because the submission is disorganised, inconsistent, or raises more questions than it answers. Credit officers read hundreds of files a month. A file that’s hard to process often loses to one that’s clear.
5. You approached the wrong bank for your sector.
Every bank runs internal sector appetite tables that update quarterly. The same file can be approved at Bank A and declined at Bank B on nothing but sector fit. Applying blindly — or to whichever bank your current RM happens to represent — is how strong cases get unnecessarily rejected.
6. The shareholder profile doesn’t hold up.
Banks lend to the business but hold shareholders personally. A director with weak personal CCRIS, no asset base, or reluctance to sign a guarantee can sink an otherwise clean file. It’s rarely stated in the rejection — but it’s frequently the real cause.
What to do about it.
None of these six reasons mean your business is unbankable. They mean the submission didn’t align with how credit actually reads files. Fixing the alignment — better file presentation, right-bank matching, realistic facility sizing, and a clean narrative — turns most “borderline” cases into approved ones.
That alignment work is the core of what we do.