In this article we look at why other banks and/or financial institutions sometimes approve your finance application even when you’ve been rejected by your own bank.

The financial industry is now much more competitive than it was 20,10 or even 5 years ago.
Therefore it can pay to shop around when you are in the market for finance.

Lending Criteria
Other lenders have different lending criteria and risk standards when it comes to accepting or rejecting particular applications.
It stands to reason that depending on the lending criteria of a particular institution they may be beneficial or not according to your situation.

Ideally you would always approach the lender that is particulary positive about the type of business you are trying to raise funds for however this can take time and specialist knowledge.

Recruitment of new business
Some lenders will be more aggresive in their lending policy to try to bring in new current account business. So the deal could be that your proposal would be accepted provided you switch your account to the new bank.

3rd party/Broker introduction
Some lenders will be more likely to approve applications if they have been presented by a broker that has a good reputation for introducing quality business and new clients.
The broker is sometimes able to match the particular application to either a high street or specialist lender.
The broker may also be able assist with presenting the business case in the optimum way for the lending institution concerned.

Personality
As in all walks of life sometimes its just about chemistry!
We know of cases where a manager in one branch refused the application but a different manager in another branch of the same bank accepted the application.

Short Term Finance
Some lenders are more concerned about the security that is being provided than the quality or the reason for the application for funds.
This is especially true of some short term finance organisations.
However, the benefits are that funds can be raised much more quickly and there is little concern with the reason for the funds.
This type of lending can sometimes assist applicants that have poor credit histories to raise funds where they have been refused elsewhere.
However, the disbenefits are that the rates are higher and the lenders can be more aggressive in foreclosing in the case of a default.

Empathy with your industry or business
Other banks and their personnel may just understand more about your industry or business and because of this feel more comfortable about accepting your proposal.