Business loan and credit card applications withdrawn after they were accepted

Pamash11

Hi all,

So I applied for business lending and then a business credit card a few months after and I am a bit confused with how my applications were treated and not sure if this is a common thing.

So the first application was for a small business loan, the application had match funding, passed affordability and passed the credit check. However, the business manager who was dealing with the application did not want to put the application through as he needed more information (he didn't say what info as he had all the information required provided) and said he would give me a final answer in a few days. Few days later, surprise surprise, I got a letter from the bank saying the application was denied and I should consult a credit reference. My credit is squeaky clean with no defaults, arrears, no late payments etc and everything paid on time. The application also passed the bank's credit checks, I saw it with my own eyes, so that excuse did not make sense.
Anyway, fast forward a few months later, I saw a message through our online bank account inviting our business to apply for a business credit card. I thought why not as an emergency card. Applied for it, got a phone appointment to complete the application, went through the whole application which was about 30mins long. The application passed credit checks and the lady told me the card has been approved and she would send some documents for me to sign and I would get the card as soon as they recieve the documents. Brilliant! Well, an hour later, I get a call from the same business manager saying ah actually, they can't give us this card due to something the system flagged up and she needs to do the application again! She wouldn't tell me what the flag was. I was !!!!ed off but went through this application again since she said she wouldn't run a second credit check as I had already passed it. Do the application, we get to finances and she says oh actually the bank needs to see atleast £2500 for every £100 they lend out, just to be secure!! I thought what?! The application is for a £1500 limit credit card for emergency use, if you look at my credit file, I have no history of exceeding my credit limit or late payments and I can comfortably repay this myself in the unlikely event it was maxed. She said the business did not meet the £2500 for every £100 rule and therefore she had to reject the application, which she did.

I am not sure how to feel and it has bothered me for a while. This is with LLOYDS bank. Is this a common thing in business banking or general banking?

[Deleted User]

Yes. It's common for people not to be able to get the credit they think they should. Lenders view risk very differently to customers.

Make sure you periodically check all three of your credit files from time to time - as well as CIFAS.

Pamash11

I have reports from all three CRAs, my credit is squeaky clean - no CCJs, no defaults, no late payments, no debt, everything paid on time, credit card has less than 30% usage of credit limit, past loans settled in full with no missed payments, on electoral roll for over 5 years. These applications passed the bank credit checks and affordability checks, this is not just me thinking this is credit I should get. They passed all the checks put in place by the bank but for whatever reason the business managers decided to exercise their own powers and refuse the application after it was approved by THEM. If they declined it first time round saying it didn't pass their credit checks etc then fair enough.

Pamash11

Furthermore, we generate enough income to pay off the £1500 credit card in full, every month, in the unlikely event we used it to the limit. We bank with them so they had all the income information to see for themselves

Shakin_Steve

I, too, would feel a bit peeved at being messed about. However, you could look at it this way: You got by without the business loan you applied for, and you'll definitely get by without the credit card. Unless you went elsewhere for the loan, you have already saved 'a few' months interest payments.