The 7 real reasons Canadian banks decline small-business loans
Declines rarely come from one dramatic flaw. They come from a handful of quiet, avoidable ones — the same ones, over and over.
Here's what actually sinks files, in the order I saw them most:
- Thin or unproven management. The plan never makes the case that you can run this.
- Weak repayment capacity. The cash flow doesn't comfortably cover the debt.
- Undocumented numbers. Revenue and expenses with no stated basis.
- Too little owner contribution. Not enough skin in the game.
- Vague use of funds. "Miscellaneous $40,000" is a red flag.
- No grip on the market. No real sense of competitors or demand.
- Presentation. A disorganized file reads as a disorganized operator.
The pattern
None of these are about a bad idea. They're about a file that a careful stranger can't verify. Fix the checkability and most declines never happen.
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Score my plan — freeLenderReady is an educational service, not a lender, broker, or financial advisor. Lending criteria vary by institution and change over time; treat this as a starting point, not a guarantee.