Ans:
There are several reasons why an application for a business loan might be rejected. The most common causes include the following:
1. Insufficient collateral: Most lenders will require some form of collateral before approving a loan. The application will likely be rejected if the borrower needs more collateral to secure the loan.
2. Poor credit history: A borrower's credit history is one of the most important factors lenders consider when assessing a loan application. The application is likely to be rejected if the borrower has a history of missed payments or defaults.
3. Inadequate financial documentation: Lenders will require the borrower to provide financial statements and other documentation to assess the borrower's ability to repay the loan. If the borrower offers adequate documentation, the application may be accepted.