Last updated September 2026. General information, not legal or financial advice for your business.
The question we hear a lot does not start with a question. It starts with a printout.
An owner gets turned down, reads the letter twice, and cannot find the part that explains it. There is a reason code. There is a score. There is a line about the decision being based on information in a consumer report. Nowhere does it say what was measured, or what a good version of his file would have looked like.
So he assumes the business failed the test. Usually the business was never the thing being tested.
What the national numbers look like right now
The Federal Reserve's Small Business Credit Survey is the best picture we have. The 2026 report covers 6,525 employer firms, surveyed in the fall of 2025.
- 42% of applicants got the full amount they asked for. 36% got some or most of it. 22% got none.
- Applicants went to large banks first, then online lenders, then small banks. Online lenders have gone from 17% of applications in the 2020 survey to 29% in the 2025 survey.
- Small banks fully approved 57% of the firms that applied to them.
- And the part worth sitting with: 60% of firms that borrowed from an online lender said the cost was higher than they expected, against 37% at small banks and 32% at large banks.
Read those last two lines together. More owners than ever are applying to the fastest channel, and that channel is the one where the cost surprises them afterward. Speed and clarity are being traded against each other, and most owners do not realise they are making the trade until the payments start.
There is a third number in that report worth noting. 77% of firms said rising costs, tariffs, or both were a financial challenge. More than four in ten named tariffs specifically. So the same year that made capital harder to price also made it harder to do without.
What a score is, and what it is not
A personal credit score is a backward looking summary of how one individual has handled personal borrowing. It is a real signal. It is not a small signal.
It is also not a description of a business.
It does not know that the slow month happened because a customer paid late. It does not know that three of your six customers have been with you for four years. It does not know that you funded the last expansion out of the operating account and paid it off early. It does not know the difference between a business that is shrinking and a business that is waiting.
That is not a flaw in the score. Scores were built to do one job. The problem is what happens when the score becomes the whole decision, because then a business that would obviously pass a human read is sorted out before anyone does one. The Fed's own numbers this year show 46% of small businesses are now using AI in their own operations. The tools sorting their applications got there first.
Four things a person reads that a model weighs badly
We are a funder. We make money when a business takes funding from us, and you should weigh what follows accordingly.
When an underwriter here opens a file, credit is one input. These are the four that usually decide it.
Where the deposits come from. Volume matters less than shape. Steady weekly deposits from several customers is a different business from a single monthly wire, even when the annual total is identical.
Why the bad month was bad. This is one of the most common reasons a file gets approved here after being declined somewhere else. A drop with a reason behind it and a recovery on the other side is a story. A model sees a number that went down.
What you already owe, and to whom. Existing obligations matter, but so does how they are performing. An owner paying three balances on time is telling you something different from an owner who has missed two.
Whether you have paid anybody back before. Repayment history is the strongest thing in most files and one of the least weighted by automated decisions, because it lives in your bank statements rather than your credit report. If you have funded with us before and paid as agreed, that changes what we can do for you more than any other single fact.
Our credit floor is 550. Much of the category stops reading at 650. Credit is one input, not the whole decision, and that sentence has to survive contact with an actual file or it is just marketing.
What I would tell an owner holding a decline letter
The hardest truth. A decline is not always wrong. Sometimes the file says what the score said. If you have three open balances, falling deposits and no explanation for either, more capital is not the answer and anyone who tells you otherwise is selling. We turn down applications for exactly that reason and we would rather say it now than after.
The strategic play. Before you apply anywhere else, get the three months of bank statements you are going to send and read them the way an underwriter would. Find the worst month. Write down, in one sentence, what happened. If that sentence is good, you are in far better shape than the letter suggested. If you cannot write it, that is the real finding.
And the reassurance. A decline from a lender that never read the file is not a verdict on your business. It is a verdict on whether your business fits a template. Those are different, and the second one you can do something about.
The bottom line
The letter told you that you were declined. It did not tell you what was measured, because what was measured was a number, and your business is not one.
If you were turned down because of a credit score or because of an automated decision, send us three months of bank statements. A person reads every file here, and most applications get a decision the same day. If it is a no, you will get a reason you can act on.