How to Talk to a Customer Who's Been Turned Down Elsewhere

A customer walks in, and before you get very far, they mention it. They tried to get financing somewhere else. It didn't work out. Now they're standing in front of you, not sure if there's any point in continuing the conversation.

Here's the thing most vendors get wrong in that moment: they either drop the subject and hope it doesn't come up again, or they try to push the sale forward without addressing it. Neither approach helps the customer, and neither helps you close the deal.

There's a better move. Send them to me before you even start building out the deal.

Why Referring Early Beats Referring Late

Most vendors wait until the customer picks equipment, agrees on a price, and is ready to sign before financing enters the conversation. That order makes sense when the customer's credit is straightforward. It falls apart when the customer has already been turned down once.

If someone's already had a financing application denied, waiting until the end of the sales process just means finding out, again, at the worst possible moment, that the deal can't get done the way it was structured. That's a wasted afternoon for you and a second disappointment for the customer.

Flip the order instead. If a customer mentions they've been turned down before, loop me in early. I can dig into the full picture before you've invested time building a deal around equipment or pricing that might not end up working.

What I Actually Look At

A single declined application doesn't tell the whole story. Lenders decline for a lot of reasons, and not all of them are permanent. When you send a customer my way, here's what I'm digging into:

• Business profile. How long they've been operating, revenue trends, how the business is structured.
  

• Personal credit profile. Not just the score itself, but what's actually driving it. There's a real difference between a low score from a few late payments and one from too many open inquiries.
  

• Previous business experience. A first-time owner and someone who's run three companies before this one get evaluated differently, even with similar credit numbers.
  

• Industry. Some industries are easier to place with certain lenders than others. What got declined at one shop might be a normal Tuesday for a lender who specializes in that space.
  

• Equipment itself. New, used, age, type. All of it factors into what options exist.
  

Put together, this usually surfaces options that a single declined application wouldn't show. Sometimes it's a different lender. Sometimes it's a different structure. Sometimes it's a smaller amount to start, with room to grow into a bigger deal later.

When There Isn't an Option, Yet

I want to be straightforward about this part: sometimes I dig through all of it and the honest answer is that I can't put together financing right now. That happens, and I'm not going to sugarcoat it or send you a customer with false hope.

But even then, the conversation isn't wasted. If I can't get a deal done today, I can usually tell the customer exactly why, and what would need to change for that to be different. Paying down a specific balance. Waiting out an inquiry. Building a few more months of time in business. That's not nothing. A customer who leaves with a clear path forward is a lot more likely to come back and buy from you once they've cleared it, instead of writing off the whole idea of financing altogether.

The Bottom Line

A declined application isn't the end of the conversation, it's a signal to bring in someone who can look at the whole picture instead of one data point. Refer the customer before you build the deal, not after. Worst case, they get a clear answer and a path forward. Best case, you close a sale that would've otherwise walked out the door.

If you've got a customer standing in front of you right now who mentioned a previous denial, that's exactly the moment to call me.

FAQ

Does a customer need to have a formal denial letter for this to be worth pursuing? No. Even a vague "we tried somewhere else and it didn't work" is enough to start. I'll ask the right questions to fill in the rest.

Will you tell me why a deal didn't work if you can't get it done? Yes, as much as I'm able to. Knowing why matters, both for the customer's next steps and so you understand what to expect if a similar situation comes up again.

Does referring a customer early slow down the sales process? Usually the opposite. Finding out early whether financing is workable saves you from building a deal around equipment or pricing that has to be renegotiated later.

Jared Holmes is the founder of Brilliance Funding Partners, where he helps business owners navigate the commercial lending landscape with confidence. With 10 years of hands-on experience in SBA lending, equipment financing, and working capital solutions, Jared focuses on asking the right questions and delivering financing strategies that make sense for each business. Connect with Jared for a personalized conversation about your options.