Your revenue grew 18% last year. Your customers are paying \u2014 mostly on time. Your CA filed everything correctly. And yet the relationship manager sent you a regret letter, or worse, just stopped returning calls.<\/p>\n
Nobody told you why. Not in plain language.<\/p>\n
The bank does not reject businesses. It rejects financial files. The business behind the file is often excellent \u2014 the file just did not tell that story.<\/p><\/blockquote>\n
What the bank is actually looking at<\/h2>\n
When a bank evaluates your credit application, they calculate four numbers:<\/p>\n
\n
- DSCR<\/strong> \u2014 can your cash flow cover your loan repayments? Bank wants above 1.25.<\/li>\n
- TOL\/TNW<\/strong> \u2014 how much do you owe compared to what you own? Bank wants below 3x.<\/li>\n
- Current Ratio<\/strong> \u2014 can you cover short-term obligations? Bank wants above 1.2.<\/li>\n
- Debtor Days<\/strong> \u2014 how long are customers taking to pay? Above 90 days is a red flag.<\/li>\n<\/ul>\n
The three most common rejection reasons<\/h2>\n
1. DSCR below threshold.<\/strong> Your revenue may be healthy but margins are thin, or existing EMIs are eating your cash. Fix: reduce existing debt, improve margins, or restructure before applying.<\/p>\n
2. GST vs bank turnover mismatch.<\/strong> If your GST shows \u20b95Cr revenue but your bank account shows \u20b93Cr credits, the bank assumes either cash sales or inflated numbers. Fix: reconcile and explain every significant difference.<\/p>\n
3. High debtor days with no explanation.<\/strong> Above 90 days and the bank assumes collection problems. Fix: submit an ageing analysis with a written explanation of each major debtor.<\/p>\n
What to do in the next 60 days<\/h2>\n
\n
- Week 1: Get last 2 years audited accounts. List all existing debt \u2014 outstanding, EMI, rate.<\/li>\n
- Week 2: Calculate your DSCR, TOL\/TNW, and current ratio.<\/li>\n
- Week 3: Write a one-page business narrative \u2014 who you are, what you sell, why your credit profile looks as it does.<\/li>\n
- Week 4\u20138: Fix the one or two things your ratios show as weak before approaching the bank again.<\/li>\n<\/ul>\n
The bank’s credit team has seen thousands of files. A file that anticipates their questions and answers them proactively converts at a dramatically higher rate.<\/p>\n
\nStart today<\/div>\nDid this help? Get the full picture.<\/div>\n