FTC Business Alert

Federal Trade Commission  Bureau of Consumer Protection  Offi ce of Consumer and Business Education

May 1999

Getting Business Credit 

Whether you’re planning to start your own business or expand the one you own, you may be in 

the market for credit. When you shop for a loan or line of credit, remember that the law protects you 

against discrimination. The Equal Credit Opportunity Act (ECOA) prohibits creditors from denying 

you a loan based on reasons that have nothing to do with your credit-worthiness.

The Federal Trade Commission (FTC) wants you to know that:

• You cannot be denied business credit on the basis of your race, color, religion, national origin, sex, 

marital status, or age — or that of your customers. For example, if you request a loan to open a 

store, a creditor can’t deny your application based on your race or your customers’.

• If your application for business credit is rejected, you can find out why. You must submit a written 

request for the reasons within 60 days of the denial. The creditor must give you the specific reasons 

— in writing — within 30 days of your request. If you don’t agree with the reasons, consider 

dis cuss ing your concerns with the lender; you may be able to resolve the issues.

• If your business is small (less than $1 million in gross revenues), the lender must keep records of 

your credit application for one year after telling you of the credit decision. If your business grosses 

more than $1 million, the lender has to keep your records on file for only 60 days after denying you 

credit. If you ask that your records be kept longer, however, or if you ask for a written statement of 

the reasons for denial, the lender must keep your file for a year. If you don’t ask about the reasons 

for denial within 60 days, the law permits the creditor to destroy your records. Note that these 

records could be important for any legal action you may consider against a lender.

You have the right to sue a creditor who doesn’t comply with the law. If you have a complaint 

about a government lender, public utility company, small loan and finance company, travel and 

expense credit card company, or other non-bank creditor, you may want to file a complaint with the 

FTC.

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices 

in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a 

complaint or to get free information on consumer issues, visit www.ftc.gov or call toll-free, 

1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet, telemarketing, 

identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database 

available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

Your Opportunity To Comment

The National Small Business Ombudsman and 10 Regional Fairness Boards collect comments from 

small businesses about federal compliance and enforcement activities. Each year, the Ombudsman 

evaluates the conduct of these activities and rates each agency’s responsiveness to small businesses. 

Small businesses can comment to the Ombudsman without fear of reprisal. To comment, call toll-free 

1-888-REGFAIR (1-888-734-3247) or go to www.sba.gov/ombudsman.