New Book Reveals a Key Factor Behind Traditional Banks' High Small Business Loan Denial Rates

Discover a key factor why small business loan applications often fail and how to boost your chances with insight from this new book.

HOUSTON, TX, UNITED STATES, December 2, 2024 /EINPresswire.com/ -- When it comes to securing a traditional bank loan, many small business owners focus on assembling financial documents, improving credit scores, or building a solid business plan. While these are essential steps, an often-overlooked skill could significantly influence a bank’s decision: how effectively the business owner talks about their business.

Lenders don’t just assess numbers; they evaluate people. For business owners, being able to explain their company’s operations, financial health, and future potential is critical. Bank officers often make decisions based on whether they feel the applicant understands their business and its unique position in the market.

This becomes particularly vital when discussing how a business has weathered adversity. For example, businesses that survived the economic uncertainty of the COVID-19 pandemic have compelling stories to tell. Lenders want to know how those businesses adapted, what strategies helped them overcome challenges, and what lessons they learned.

“Confidence and clarity are game-changers,” says a section from Before You Apply: Key Tasks for Small Businesses Pursuing Bank Loans, a guidebook for business owners preparing to approach traditional lenders. “When a business owner can explain not just what they do, but how they do it better than competitors and why their business matters, it signals competence and reliability to a lender.”

The book, authored by business expert C. Nina Ross, emphasizes that effective communication can be the difference between approval and rejection—even if other loan criteria are met. “Lenders need to know they’re investing in someone who has a firm grasp of their business. If you can’t talk about your operations or explain how you make money, why should a bank believe in your ability to repay a loan?”

Ross notes that explaining what makes a business unique is another key component of loan approval. Banks often see applications from businesses in competitive markets, making it vital for owners to highlight their differentiators, whether that’s a niche product, exceptional service, or innovative processes.

Another major factor is resilience. Businesses that survived the challenges of the pandemic, for instance, can use those experiences as a strength. “A lender might ask: What did you learn? How did you pivot? What steps did you take to ensure survival? These are the kinds of details that showcase your adaptability and problem-solving skills,” Ross writes.

In addition to these insights, Before You Apply: Key Tasks for Small Businesses Pursuing Bank Loans provides a comprehensive checklist for business owners preparing to approach lenders, covering everything from financial statements to answering tough questions about their business model.

Ross, who has over 20 years of experience in business consulting, says that preparing to speak confidently and knowledgeably about your business doesn’t just help with banks—it can also enhance credibility with investors, partners, and even employees.

For business owners looking to improve their loan application process and build confidence, the book is available on Amazon now.

About the Author:
Nina Ross is the CEO of CIRTT Consulting, a Houston, Texas-based firm specializing in helping solopreneurs and micro-businesses solve unique challenges. She has worked with hundreds of business owners to develop strategies for growth, funding, and operational success. For media inquiries or to schedule an interview with Nina Ross, please send her an email.

Nina Ross
CIRTT Consulting
nina@cirttconsulting.com
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