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3 Reasons You Can’t Always Bank On Your Bank

As a business owner, you’re regularly on the hunt for new and innovative ways to grow your business, aren’t you? And, as the old saying goes, “it takes money to make money”. This is why so many entrepreneurs head into their banks with hopes of securing business loans. The way they see it, a little financial help would get them a lot closer to renovating their stores, launching new products lines or expanding to new locations.

Those, of course, are just a few of the many business growth ideas that have likely crossed your mind. The only problem is that securing funding from a bank for such ventures is a lot harder than you originally anticipated. Unfortunately, when it comes to funding your business, you can’t always bank on your bank.

Here are three reasons why:

1. It judges you according to your credit score.

Have you had any issues making timely payments on your credit cards? Have you defaulted on a loan in the past? When it comes to borrowing money from a bank, your past can come back to haunt you. As explains, your credit history is one of the first things a bank will look at when reviewing a business loan application.

“A good credit score proves to the bank that you have properly managed your personal affairs,” notes the site, “It also tells bankers that your business will do the same and make payments on time. If your personal credit scores are low, the underwriting team will deny you. If you cannot manage your personal finances, then you may appear to be too risky for a business loan from the bank.”

2. It won’t fund you without collateral.

You’d be hard pressed to come across a bank that is willing to risk letting someone borrow money without that someone risking something him/herself. Collateral is generally a piece of property that a bank can seize in the event that a borrower defaults on loan payments. Essentially, it is security for the bank.

“Banks usually require security for business loans, so not holding a personal or business asset such as property, a vehicle, retained income or another investment can cause your application to be rejected,” reports Aliyyah Camp on, “Using the assets you already own as security is a good way to improve your application and eventually grow your business.”

3. It will likely deny your application based on your cash flow.

Do you have enough money to run your business on a daily basis? Are you paying your employees on time? Are you able to pay your suppliers? Can you stock the shelves when necessary? If you have a weak or inconsistent cash flow, your bank is likely to deny your loan application.

“Banks are extremely concerned if your business doesn’t have enough free cash flow to make the monthly payments from a loan, cover payroll, rent, and other expenses,” says, “Start-ups and small businesses often have problems keeping enough money in their bank accounts.”

At Synergy Merchants, we know you can’t always bank on your bank. Therefore, we offer Canadian business owners a much easier route to securing business funding. Learn all about our unique merchant cash advance program by calling us at 1-877-718-2026 or emailing us at You can also apply online for a free, no obligation quote!

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