Applying for a business loan should feel like a step forward, not a waiting game. But for many small business owners, delays happen — not because they’re unqualified, but because their application throws up red flags they didn’t know existed.

At Approvd, we work with business owners across industries who are often closer to getting approved than they think. They just need a better way to present their file.

Whether you're applying for a merchant cash advance, a line of credit, or another type of funding, here are the 7 most common red flags that can slow you down and what you can do to get ahead of them.

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1. Incomplete or Outdated Bank Statements

Why it’s a red flag:
Your recent bank activity is the foundation of most funding decisions. Missing pages, outdated months, or cropped screenshots create uncertainty and slow down underwriting.

Fix it:
Send PDF copies of your last 3 to 6 months of business bank statements, including all pages. Avoid screenshots or photo uploads. If you’re unsure what’s needed, Approvd’s intake team will flag any gaps right away.

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2. High Number of Overdrafts or NSFs

Why it’s a red flag:
Frequent overdrafts or non-sufficient funds (NSFs) signal cash flow issues, even if your revenue looks strong. Funders want to see that you can handle consistent payments.

Fix it:
If your statements show frequent overdrafts, consider waiting a few weeks to reapply once your account stabilizes. Alternatively, let Approvd help you position your file, we often explain temporary dips or offset them with strong deposits.

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3. No Clear Business Revenue Pattern

Why it’s a red flag:
Underwriters look for consistency in how you make money. If your income appears irregular, seasonal, or sporadic without explanation, they may hesitate.

Fix it:
Attach context. Are you a landscaper with peak revenue from April to August? A retailer with holiday spikes? Let us know. Approvd helps you tell the story behind the numbers.

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4. Mixed Personal and Business Accounts

Why it’s a red flag:
Depositing business revenue into a personal checking account (or vice versa) confuses underwriters and makes it harder to track cash flow.

Fix it:
Use a dedicated business bank account and route all business-related income and expenses through it. If you’ve already been operating this way, flag it to your Approvd advisor so we can explain it in your file.

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5. Low Daily Balance or High Withdrawals

Why it’s a red flag:
Even if you’re generating strong monthly revenue, having a low daily balance or pulling cash too frequently can indicate tight margins or financial instability.

Fix it:
Plan to maintain a higher daily balance in the weeks leading up to your application. Funders want to see that you have some breathing room, especially if you’re requesting a revenue-based product like a merchant cash advance.

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6. Business Is Too New or Recently Inactive

Why it’s a red flag:
Most lenders prefer businesses that have been operating for at least 6 months and showing steady deposits. If your business has been open less than that, or if you paused operations recently, approvals get tougher.

Fix it:
Approvd works with newer businesses, but we’ll need clear proof of active operations like revenue, vendor invoices, signed contracts, or business licenses. We can guide you on the minimum requirements and connect you with more flexible programs.

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7. Inconsistent Information Across Documents

Why it’s a red flag:
A mismatch in business names, ownership info, or tax IDs between documents causes delays, or worse - automatic declines.

Fix it:
Double-check that your application matches your business documents exactly. If your LLC name differs from your DBA, flag that early. Approvd advisors are trained to catch inconsistencies before submission, saving you time and stress.

Bonus: Industry-Specific Pitfalls

Some industries trigger extra scrutiny, not because they’re riskier, but because their cash flow models vary. For example:

• Construction companies often have project-based spikes. Approvd helps offset long gaps with contracts or accounts receivable data.
  
  
• Trucking businesses may deal with fuel card expenses or staggered payouts. We know how to explain those patterns.
  
  
• Medical offices might have low daily deposits but high monthly revenue. We position that properly with payment processing data.
  
  
• E-commerce brands could show delayed revenue due to third-party platforms. We can verify those deposits through Shopify, Stripe, or Amazon.
  
  

Our team knows what each funder wants to see, and how to present your file to fit the criteria.

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How Approvd Helps You Avoid Delays

At Approvd, we don’t just forward your documents and hope for the best. We:

• Review every file for red flags before submission
  
  
• Match you to funders that work best with your revenue model
  
  
• Give personalized recommendations if something is missing
  
  
• Share tips to improve your file, whether you're applying today or next quarter
  
  

Don’t Let Avoidable Mistakes Cost You Time (or Capital)

Every day you wait on funding is a day you’re missing opportunity — to hire, to restock, or to stay ahead of bills. Most delays don’t come from bad businesses. They come from small avoidable errors that Approvd can catch early.

Avoid approval delays. Let Approvd package your file right.
Apply now and take the first step toward fast, real-world capital.

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