A denial with a reason attached is information. You learn the covenant was too thin, the collateral too light, the projections too soft — and you come back with it fixed. That is what a market is supposed to do.
A denial with no reason attached is a door with no handle. 36 percentage points separate those two experiences, and the second one is what nearly half of Latino business owners walk out of the room with.
It also makes the standard advice unfalsifiable. "Come back when you're fundable" cannot be acted on, argued with, or disproven when nobody will say what fundable means. That is not a high bar. That is no bar at all — which is a different thing, and worse.
What the law actually says
The Equal Credit Opportunity Act and its Regulation B govern business credit, not just consumer credit. 12 CFR 1002.9 sets what a lender owes you when it says no, and it turns on your own revenue:
| Your gross revenue last fiscal year | What the lender owes you |
|---|---|
| $1 million or less | Notice of the decision within 30 days of a completed application. You may request the reasons within 60 days, and the lender must answer within 30 days of your written request. |
| More than $1 million | Notice within a reasonable time, orally or in writing. Reasons only if you make a written request within 60 days. |
The part almost nobody is told. Under 1002.9(a)(2) the statement of reasons must be specific. The regulation says outright that pointing to "internal standards or policies," or telling you that you "failed to achieve a qualifying score," is insufficient.
So the brush-off is not the lender exercising judgment. On a business credit application, after a written request, the brush-off is the thing the rule already prohibits. 87% of white owners get a reason. 51% of Latino owners do. The right is identical. The delivery is not.
This is what the regulation says, cited so you can read it yourself rather than take our word for it. It is not legal advice, and a lawyer or your SBDC can tell you how it applies to your file.
How to ask, in one paragraph
Put it in writing within 60 days, keep a copy, and use words that track the regulation:
"I am requesting a written statement of the specific principal reasons for the adverse action taken on my business credit application dated ____, as provided under the Equal Credit Opportunity Act and Regulation B, 12 CFR 1002.9."
Email is writing. Send it to the loan officer and to the bank's compliance address. If what comes back names internal policy or a score and nothing else, that is not a compliant answer — say so, in writing, and copy your SBDC.
Where the denial happened
Each door has its own rule. Eight of them owe you a specific written reason. One is contested. One owes you nothing — and that is the one holding the money.
SBA 7(a) Loan
The general-purpose SBA loan. Made by a bank or credit union, guaranteed by the federal government.
Reason required by lawSBA 504 Loan
Long-term fixed-rate financing for real estate and heavy equipment, through a Certified Development Company.
Reason required by lawCDFI Loan
A federally certified mission lender that underwrites differently on purpose.
Reason required by lawBank Term Loan
A conventional business loan from a bank or credit union, no federal guarantee.
Reason required by lawBusiness Line of Credit
Revolving working capital — draw it, repay it, draw again.
Reason required by lawBusiness Credit Card
Revolving credit in the business name, often personally guaranteed.
Reason required by lawMerchant Cash Advance
Cash today against a slice of tomorrow's sales. Structured as a purchase, not a loan.
Coverage contestedVenture Capital
Equity. You sell part of the company. Not credit, and not covered.
No disclosure dutyBy state
Ten states require non-bank financing providers to disclose real terms before you sign. Forty-one do not. Find yours.