My loan application was declined — what do I fix first?

Start by getting the real reason in writing. Under the Equal Credit Opportunity Act you are generally entitled to a statement of specific reasons for a business credit denial, and insufficient cash flow is a category rather than a reason. Ask which ratio failed and by how much — most underwriters will tell you, and the answer turns a guess into a work list.

• Coverage below about 1.25 times: retire the smallest high-payment obligation first, not the largest balance
• Too many recent inquiries or stacked advances: stop applying and let three to six months pass
• Add-backs the underwriter refused: have your accountant document owner compensation and one-time items properly
• A tax lien, delinquent federal debt, or an unfiled return: hard stops, and nothing else you fix matters until they clear
• Interim financials that contradict the tax return: reconcile the two before anything is resubmitted

On timing, ninety days is the usual honest answer — long enough for a payoff to show up in the statements, short enough that the file is still current. The warning is shotgunning: applying to eight lenders in three weeks leaves a trail of inquiries and, with some products, UCC filings that make the ninth decline automatic.

A declined bank file often still fits a Business Term Loan or Revenue-Based Financing today at a higher price, which is sometimes the right call and often not. Call the desk with the denial letter before you reapply anywhere — the reason printed on it usually points at a two-month fix rather than a two-year one.