The first place most small business owners look to obtain financing is from their bank. This is usually a good idea since banks will offer the best rates and you probably already have a business account there. What you might not realize is that it’s not always easy to qualify for a bank loan.

Even if your business is doing well, you might get declined, and for reasons you might not expect. Read on to learn about five issues that might be why your bank denied your small business loan.

1. Poor Credit Score

When you apply for a business loan, the bank will look at your personal credit score as well as your business’ credit score. The higher your score, the more chance you have for the loan approval. If you don’t know your current credit score, there are different services you can use to see your credit. Equifax is one; Credit Karma is another. If you need help raising your score, talk with someone at the Canadian Office of Consumer Affairs or even a debt counselling service.

2. Insufficient Cash Flow

Another way the banks use to check on the health of your business is to look at your cash flow. In fact, cash flow is one of the most important things lenders look at when they want to see your ability to repay the loan. Before you apply for a bank loan, make sure your business will be able to afford the loan repayment.

3. Errors on the Application

Mistakes can happen on loan applications; if you input the wrong phone number or miss a section, the entire application could be rejected. Take special care when entering numbers and if the form is handwritten, make sure it is totally legible. Nothing is worse than an application that cannot be read by the lender. Before you submit the application, go over it several times to make sure there are no errors or missing information.

4. External Factors

Banks look at the entire industry to get a reading on your business’ long-term success. There are multiple issues that could impact your ability to obtain financing, and there’s not much you can do about it. One example is fuel prices. As they continue to rise, transportation and shipping costs become more expensive. This can affect your profits your industry relies on those services. Another factor that might impact your ability to obtain a loan is a rise or fall in competition. Too many competitors means that the market might be too saturated for you to make a good profit.

Although you might not have any control over external factors, staying current n those factors that might impact your industry can help you choose the best time to apply for a loan.

5. Wrong Bank for your Needs

Small business owners often run into trouble when applying at banks for loans. Most often, banks will always prefer funding larger loans over smaller ones. Another issue might be that the bank you’ve applied at has procedures that prevent them from loaning to you. It’s always a good idea to ask about protocols and guidelines before you apply. Also, remember that you don’t necessarily have to apply at the bank that holds your business account.

If you’ve been unable to secure a bank loan for your small business, don’t panic. There are other options. Alternative lenders have become more common and in some cases, a preferred method of obtaining small business loans. Besides their criteria being different than banks, alternative lenders often have faster and easier application and funding processes. For some, you can apply online and have funds within 48 hours, if approved.