“My bank asked for a cash flow statement. My bookkeeper sent a spreadsheet. The bank said no.”
I hear versions of that story constantly, and here is the part nobody tells the owner: the bank usually did not say no to the business. It said no to the file. Underneath a real decline there is often a fundable company wrapped in paperwork that made an underwriter’s job impossible.
I worked in commercial banking at Webster Bank before starting Gevity, on the other side of this exact table. So let me show you what the person reading your application actually needs, why files get declined, and the package that changes the conversation.
What the bank is really deciding
Strip away the forms and a lender is answering one question: will this business generate enough cash, reliably, to make every payment, even in a mediocre year?
Everything they request serves that question. The frustrating part for owners is that banks rarely coach you on it. A loan officer wants to say yes, but an underwriter approves what the file supports. When the file is thin, you do not get feedback. You get “we’re going to pass at this time.”
The number doing the deciding is debt service coverage, and you should compute it before the bank does:
If you cannot compute that in ten minutes from your books, that is finding number one, and the bank will reach it too.
Why files actually get declined
After the obvious ones (coverage below 1.0, damaged credit), the declines I see most at $1M to $20M are file problems:
- Stale or partial financials. Returns from two years ago, a P&L with no balance sheet, interim numbers that stop three quarters back.
- Books that contradict the returns. The P&L says one thing, the tax return says another, and nobody in the file explains the difference.
- No cash flow story. Profit shown, timing invisible. The lender cannot see how cash actually moves through the year.
- Personal and business tangled. Owner draws in weird places, personal expenses in the business, negative loan accounts nobody can explain.
- No answer to “what is the money for?” A number with no plan for how it comes back reads as risk, whatever the coverage ratio says.
None of those mean the business is weak. All of them are fixable in weeks.
The report your bank is actually looking for
Here is the full package, published right here, no email required. This is what a community-bank underwriter wants from a $1M to $20M business, organized the way they want to read it.
1. The financial statements
- Last 3 years of business tax returns, complete, all schedules
- Year-to-date P&L and balance sheet no more than 60 days old
- The same period last year for comparison, so trends are visible
- AR and AP agings as of the statement date
- A debt schedule: every loan, lender, balance, rate, payment, maturity, collateral
2. The cash story
- A cash flow view of the year: a 13-week direct forecast is the strongest version (here is how to build one), a monthly cash flow statement is acceptable
- Your own coverage math from the callout above, shown, not asserted
- A one-page use of funds: what the money buys, what that produces, how it services the payment
3. The owner file
- Personal financial statement (banks have a standard form, ask for it)
- Last 2 years of personal tax returns
- Know your credit report before they pull it; explain anything ugly in writing, proactively
4. The narrative
- A one-page memo: what the business does, who buys, why revenue is durable, what the loan does, how it comes back
- Collateral list with honest values
- Current entity documents and licenses, boring but decline-proof
5. The hygiene signals
- Books reconciled through last month, no uncleared junk
- No negative balances or suspense accounts sitting unexplained
- Owner draws and loans clean and separated from operations
- Whoever prepared the numbers is named, with credentials if they have them
An underwriter who receives this package learns something before reading a single number: this owner runs a real business with real reporting. Files like this move to the top of the pile, and the questions get easier.
If you already got the no
Do not re-apply with the same file somewhere else; serial declines follow you. Instead:
- Ask what drove the decision. You will not always get specifics, but coverage, collateral, or file quality usually leaks through.
- Run the 90-second math yourself. If coverage is the issue, the fix is margin, pricing, or a smaller ask, and that takes a quarter or two of real work.
- Rebuild the file, then reopen the conversation. Banks remember applicants who came back organized. It reads as exactly the discipline they are trying to underwrite.
Getting bank-ready is also one of the fastest ways to find out what shape your finances are really in. Every issue on the checklist above, stale numbers, tangled draws, invisible cash timing, costs you money even if you never borrow a dollar. That is what a diagnostic surfaces, and it is why lenders take CPA-prepared packages seriously.
Not sure where your file stands today? Start with the five-question Gevity Score, or bring your last decline letter to a strategy session and we will read it together.
