Your bank said no. Here's what to do next.

Getting turned down by your bank stings, especially when the business is busy and growing. But a bank decline usually says more about the bank's rules than about your business. Canadian banks lend inside narrow boxes. If you don't fit the box, the answer is no, even when the business is healthy.

1. Find out exactly why

Ask your banker for the specific reason, in writing if you can. The most common ones:

• Time in business. Many bank programs want two or more years of financial statements.
• Collateral. Banks often want hard assets or personal real estate behind the loan.
• Debt service coverage. Your last year-end shows less profit than the bank wants to see relative to the new payment.
• Industry appetite. Some banks limit how much they lend to trucking, restaurants or construction, regardless of your numbers.
• Credit or tax issues. A low personal score, CRA arrears or recent missed payments.

The reason tells you where to go next. "We don't do your industry" and "your credit needs work" lead to very different places.

2. Fix what's fixable

Some declines can be turned around in weeks. Get CRA filings and remittances current. Stop overdrafts and NSFs for a few months. Move business spending out of personal accounts. If your last year-end was weak but recent months are strong, have your interim statements ready to show the trend.

3. Look past the bank

There is a much wider lending market than the big banks, and much of it underwrites on how your business performs today rather than last year's tax return:

• Equipment lenders finance trucks, machines and tools, using the equipment itself as security.
• Alternative term lenders and credit lines often decide from recent bank statements.
• Asset-based lenders lend against receivables and inventory.
• Government-backed options, like the Canada Small Business Financing Program through another bank, or BDC.

4. Don't apply everywhere at once

The instinct after a decline is to fill out every online form you can find. That usually backfires. Some sites sell your application to several companies, your phone starts ringing nonstop, and multiple credit pulls can drag your score down further.

A better path is one experienced advisor who knows your industry, understands why the bank said no, and takes your file only to the lenders likely to say yes. That's exactly how Straightline works.