Tag: NSF’s

Too many Overdrafts and NSFs

Your Business was declined for a Loan for too many overdrafts and NSFs.

Excessive Overdrafts and NSF’s per month happens from low sales and balances, especially under $10,000 a month in deposits.

It is # 6 of the Top 9 Reasons why MCA’s are declined.
Author Biography: Will Sanio

They are negative balances in a bank account by the end of the day and reported by your financial institution in their ending daily balance section of your statement.

Maybe you have had them because you have a 2nd MCA or even a 3rd Cash Advance?  If so, get approval options, Apply Below.

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Call 919-771-4177 for more info.

How can your company overcome being declined for a loan or Merchant Cash Advance for having excessive Overdrafts or excessive NSFs?   Here are several tips that your company can follow to get funding.

Be ready for the business checking account verification.  Apply below today.

Business account overdrawn.

We assist your company in overcoming these obstacles so they can prosper.

Many times a loan that is approved falls through at the last minute and does not close if there are overdrafts and NSF’s before closing.

When an account verification is done and the Account is overdrawn, the loan may then not close and be declined.

At the time you are trying to close a loan with an overdrawn business account, make a deposit immediately before the Lender checks your account balance.

If you make a deposit beforehand, you can save the approval.    If it is too late and the loan is declined, ask the funding source if you can make a deposit to bring the account into the positive will they close the Loan then?

Do not try to close a loan if your account is overdrawn.   Wait until it is in the positive.

FAQ Too many overdrafts and nsfs

Can we get funding with nsfs and overdrafts?

Approvals are issued everyday to businesses with nsfs and overdrafts in their checking account.   Still, provide a good explanation for why the account was overdrawn when asked.

How hard will overdrafts and nfs make it to get a business loan?

They do not always cause a decline. You may get approved for a lower amount with higher rates and shorter terms.

Being overdrawn in your business checking account in the last 30 days is most important, and the last 90 days are reviewed.  Rules on the maximum number vary by Lender.

How many overdrafts and nsfs can we have?

Most business loans limit these to about 5 per month. Ask specifically for any financing you may apply for. Some programs will not allow more than 3 recent overdrafts in the last 30 days.

Why were we declined for paid nsfs?

You were likely declined because the cash flow and average balances were not strong enough. Even when insufficient fund items are paid, they still happened and the funding source may believe any new debt will be too much.

Talk to lenders in advance and find out if they have a maximum number per month they accept.  We can put your business into qualifying programs so your business can get all the Capital it needs.

Other options if declined

Too many Overdrafts or NSF’s for an MCA merchant cash advance or ACH bank loan.

Talk to the Merchant Cash Advance companies and ACH business loan lenders directly about being declined for having too many Overdrafts or NSF’s per month.   Ask them if there are other programs available you may qualify for right now.   Always ask if you can start out for a lower amount.

In addition, make sure your Account is not overdrawn for a few weeks and apply at the start of the next statement month.

Possible solution:

If you know you will not be overdrawn or have NSF’s in the next few weeks, tell the Lender.

If the overdrafts or NSF’s were from a single event instead of spread out throughout the months, this can make a difference.   It is an isolated incident.

Let them know the NSF’s resulted from a one time event.   Many decisions are automated and made quickly.   Make a strong case and the lender may reconsider your request.

If you still cannot get an offer, ask how long you have to wait before your application can be reconsidered.  It is usually 30 days.  Ask what needs to be corrected to avoid being declined again.

Get other working capital loans

Your business can apply for other types of financing if time is critical.   Which ones are best depend on your company’s financing needs and situation.    Choices include:

Also consider financing based on Real Estate,  Equipment Assets
that are free and clear, and Account Receivables.

Monthly Term loans up to 60 months or longer with full financials.

You can overcome being declined for a MCA Merchant Cash Advance for having too many Overdrafts and NSF’s.     The SBA small business administration offers advice and workshops.