Powerful people in business easily obtain capital loans from banks or other financial companies, however, SMEs still often have difficulty getting loans. There are a number of reasons why the proposed credit is not approved. It is well known that SMEs have limited capital, thus they have difficulty expanding their business to a better direction. In general, there are a number of things from both the internal conditions of the creditors and the external conditions of the debtors that have caused the application of business capital loans to be rejected by creditors, as follow:

Incomplete Requirements

The first cause is incomplete requirements. The requirements for applying for a loan must be well understood for the debtor. The debtor must understand that between banks and other finance companies have different requirements, thus the debtor must ensure that various types of requirements are completed before applying for a loan. The general requirements for applying for a loan are ID number, Tax Identification Number, address and others.


One of the reasons to reject the proposed business capital loans is the bad personality of the debtor. Even though the requirements have been completed but the characteristics or personality of the party applying for credit is not good, then the loan will not be granted. In addition, the refusal of the loan is also caused by a history of bad loans. Before granting a loan, the creditor will inspect whether the debtor has ever had a problem with the previous credit or loan. Therefore, do not underestimate the loans that are owned because the bad loans will have an impact on the loan in the future.

The Business Criteria is not Feasible

The banks or financial companies will inspect at the criteria of the business run by the debtor before granting a proposed loan or credit, including the customer's profile and business products. In addition, the duration of operational activities is also considered because MSMEs will not be able to get a loan if the company is not yet five years old.

Included in the Negative List

Several financial companies enforce strict policies to grant loans for the debtor. One of the reasons why SMEs loans are not approved is that the debtor's business is included in the negative list by the creditors. Businesses or SMEs that are related to immorality, gambling, trade in illegal goods, and selling alcoholic beverages and liquor will be rejected.

The Proposal is not Feasible

One of the reasons to reject the proposed loan is that the proposal submitted is not feasible. A proposal is needed to apply for a loan to a large bank or financial company as creditors can understand the business run by the debtor through its proposal. Therefore, the debtor must understand the terms and conditions imposed by the bank or financial company that will become the creditor.

There are some common mistakes why the credit proposal cannot be granted such as not mentioning the amount of credit, not mentioning the business experience, not including the legality, less detailed location, ownership of the place of business, and not attaching the latest data in the form of facilities and capacity.

Unsuitable Loan Guarantee

An unsuitable loan guarantee is a reason why a business capital loan application is rejected. The value of the collateral is important for proposing a loan because it cannot be below the standard specified by the creditor. The standard imposed is the loan value of no more than 80% of the value of the collateral submitted.


In addition to making a good proposal, the debtor must be able to present his proposal to the creditors. Don't underestimate this process, because some SMEs fail to obtain loans because of poor presentation methods. Avoid displaying an arrogant impression even though the business has high prospects, avoid using grandiose language or language that is too sophisticated.

In order to be able to obtain a loan smoothly, SMEs owners must avoid several things mentioned before, which could cause the proposed business capital loan is not approved or rejected.


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