In Michigan, every day people are being denied Michigan SBA loans for any number of reasons. The Michigan SBA has a reputation for being flexible with repayment terms, but can be difficult to get approved for a Michigan business loan due to the rigorous process involved when applying. Knowing why your Michigan EIDL loan was rejected could help you appeal the SBA decision and secure funding approval for your business in Michigan.
Michigan SBA Disaster Loan Denied?
If you’re a business owner who has been denied financial aid from the SBA, you should know that it is possible to be approved after reapplication. If your SBA application was rejected due to not meeting eligibility requirements or because your paperwork wasn’t complete, make sure to improve the way you present yourself before applying again.
The first thing that you should check is why your loan application was denied. Make sure to thoroughly read over the rejection letter they sent you so that it can help you better prepare next time around.
You can reapply for SBA loans, just make sure to fill out the application as accurately and thoroughly as possible.
Common Reasons to be Denied for Michigan SBA Loans
Here are some of the most common reasons for being rejected, or having your Michigan SBA loan denied:
You can’t prove that your Michigan business was directly affected by COVID-19.
This is one of the main reasons that people are rejected for SBA loans in Michigan. Make sure to include an explanation with your application that proves how you were affected by COVID-19, but also show your future plans for your business so they can see what you have to offer.
Incomplete EIDL application.
Make sure to proofread your application before submitting it! Any errors on paper will lead them to believe that you didn’t take the time to review everything beforehand. Also remember to include all necessary documents such as bank statements, leases, and tax forms in order for them to process your application successfully!
Failure to respond to Michigan SBA requests.
If applicants do not respond to emails asking for additional information or to sign loan closing documents, the application will typically expire after 60 days.
Michigan SBA business size standards not met.
Make sure to read over the information on what qualifies as a small business before applying for SBA loans. It’s possible that your company doesn’t meet the minimum requirements and therefore shouldn’t be applying in the first place.
Insufficient credit history.
Having a lack of credit history can be difficult for lenders, but having other collateral such as real estate or equipment will work in your favor!
Income that’s too low or unstable.
Lenders will want to see that you’re able to repay the loan on your own first before applying with them. Make sure that you’re bringing home enough each month and show stability by paying taxes on time and updating records as needed.
Lack of capital to repay the loan.
If you lack the resources to repay the loan, it will be difficult to approve. Make sure that you’ve taken the time to save up and have cash readily available.
No collateral to offer.
If you don’t own any assets or have a permanent location, it may be hard for lenders to feel comfortable loaning you money. Make sure that you read over the application and receive an SBA loan with a co-borrower who does have collateral.
Michigan SBA loans aren’t for everyone and can help those with a stable business in a safe industry. Banks want to know that you’ll be paying them back so it’s harder for people who work in more unstable industries such as entertainment or mining.
Substantive character issues.
The SBA doesn’t want to get involved with people who have a history of bankruptcy, lawsuits, or hired liens. Make sure that you read over your application again and avoid issues by only applying for one loan at a time.
An active Michigan tax lien or judgment against the business.
If you have a history of being sued, try to avoid applying with the Michigan SBA. There are other lenders that will be more willing to work with you depending on factors such as location and collateral.
Can I Find Out Specifically Why My Michigan SBA Loan Was Denied?
Unfortunately, the SBA won’t disclose why you were rejected because it’s their policy to guard your personal information.
However, if you feel that there was an error in your submission or something else related to the application process, you can always contact them again and ask for more information.
Can I reapply for Michigan EIDL after being denied?
The applicant has up to 6 months to formally request a Michigan loan reconsideration, even after the application deadline of 12/31/21.
If the decline letter requested specific information or documentation for reconsideration, you must include those items.
Be sure to include:
- Business Name
- Borrower’s Name
- Tax ID/EIN or SSN
- Application/Loan Number
- IRS Form 4506-T (form must be received within 120 days of the signature date)
The process will vary depending on the reason for the decline.
How does reconsideration for the Michigan SBA loan work?
Once you have gathered your proof of financial hardship, the next step is to contact a Loan Specialist at the Michigan SBA office.
The SBA will look over all of your information. Suppose they find it satisfactory enough to meet certain eligibility criteria for reconsideration. In that case, they will send your case on to the U.S. Department of Treasury for final approval before disbursing any funds.
For most MI EIDL reconsideration, most cases take 30-45 days. Still, they can take up to 60 days depending on federal guidelines and if changes need to be made after reviewing more information about the case.
As a result of the increasing number of requests, you shouldn’t expect a quick response. However, if your status shows as “Pending,” then you should still submit supporting documentation for reconsideration because your status might change even if the SBA loan application has been denied.
Michigan SBA Assistance
For Michigan SBA local office contact information, see here:
Michigan SBA FAQs (Frequently Asked Questions)
What is the process to receive a Michigan SBA COVID-19 EIDL loan?
There are four steps in the COVID-19 EIDL application process:
- Apply at DisasterLoanAssistance.sba.gov.
- Receive Loan Quote. This is an estimate of the qualified loan amount; it does not mean the loan is approved. Michigan applicants can choose the loan amount up to the maximum.
- Application Review. An SBA Loan Officer will review the Michigan application for completeness and may contact the applicant if more information is needed.
- Decision. A decision is made as to whether the application is approved or declined.
For speed and personalized attention, Schedule Your Free Michigan Disaster Loan Consultation call. Depending on your situation, for a small fee, we may be able to help.
Conclusion and Summary if Your SBA Loan was Denied in Michigan
If your Michigan SBA loan was denied, the very first option is to file an appeal and request reconsideration for your Michigan EIDL loan. You can also contact an SBA Michigan Loan Specialist to assist you through the whole process, however, it can sometimes be difficult to get personal attention depending on how busy their office is.
If you have any further questions, leave a comment below and we’ll do our best to assist your Michigan business.
Denied? Michigan Loan Denial Assistance
Has your Michigan EIDL SBA loan been denied? We can assist you in filing an SBA loan reconsideration for your business in Michigan.
Did you already receive an EIDL SBA loan for your Michigan business? We can assist your Michigan business in requesting additional SBA EIDL loan funds. Or, help you with the Michigan ERC program, which is the Employee Retention Tax Credit program for Michigan businesses to receive $26,000 per employee by amending their 941-X payroll forms for W-2 employees working in Michigan.
Whether your MI business entity is classified as a sole proprietorship, independent contractor, LLC, C-Corp, S-Corp, landlord, property investments, rental property owner, or other types of qualifying small business entities in Michigan, we may be able to help you.
Schedule Your Free Michigan Disaster Loan Consultation call to see if we may be able to help.
Cover Image Credit: 123RF.com / Fizkes, IgorBondarenko / Disaster Loan Advisors.