A rejection is a decision. Find out what drove it.
A lender looks beyond projected profit. Equity contribution, pre-sales, the sponsor’s record, legal title, security and debt-service capacity all matter. Sector limits and credit policy matter too. A viable project may simply fall outside one lender’s mandate.
Ask which factors carried the most weight and whether any changes would justify reconsideration. The bank may not disclose its full reasoning, but even partial feedback helps distinguish a solvable problem from a restriction outside your control.
Four possible reasons. Four different responses.
Insufficient equity? Consider additional sponsor capital, a co-investor or mezzanine. But first confirm whether the senior bank accepts subordinated financing and on what terms. Not every additional source of funds qualifies as the required equity.
Pre-sales below the threshold? Determine whether pricing, demand or project readiness is holding the deal back. Early-stage funding may help, but only if there is a credible sales strategy and a route to later financing.
Unresolved title or missing permits? Address the underlying issue first. Higher-cost capital will not cure a legal defect or make an authority issue its decision sooner.
Outside the bank’s lending appetite? Another lender may assess the project differently. Before preparing a new submission, check its appetite for the sector, project size and proposed structure.
Do not solve a credit rejection with a prettier spreadsheet
Recycling the same file across lenders does not strengthen the case. If the reason for the refusal remains, the outcome may not change.
Do not adjust prices, costs or timing merely to make a model meet a lending ratio. Every change should be supported by evidence that can withstand due diligence.
Faster financing may cost more, while an unrealistic maturity can create the next problem. Compare total cost, security and delay exposure against the project’s actual cash-flow profile.
What makes the first discussion useful
Share the project documents, the current financial model, any reasons the bank provided and the deadline for funding. You do not need a new presentation. We need to understand what stopped the financing.
If an alternative structure deserves consideration, we can identify the areas to assess. If the project is not yet financeable, we explain what needs to be addressed first and why.
