Banker Referral Guide: How to Refer Declined Business Loan

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Bank staff member talking with a customer who is leaning on a reception counter — The six steps below all turn on one moment: the conversation you have while the customer is still sitting in front of you.

Review Your Institution's Outside Business Activity Policy

Before registering, confirm that your bank's policy permits referral arrangements with third-party lenders. Most community banks and credit unions permit this with written disclosure. Some larger institutions require pre-approval from compliance.

T.A.G. can provide a letter describing our program for your compliance officer upon request. Most loan officers receive approval within 1-2 weeks. This is the only step that requires advance work; the rest is fast.

Register as a Partner

Once you have clearance (or if your institution doesn't require it), register at /affiliate. You'll receive your unique referral link, partner agreement, and access to the partner portal. Takes 5 minutes.

Screen Declined Applicants

Not every declined applicant is a good MCA candidate. Use the Client Qualification Checklist. The strongest MCA candidates are declined for reasons that don't apply to MCA underwriting:

Declined for insufficient collateral, MCA requires none
Declined because business is under 2 years old, MCA minimum is 6-12 months
Declined because loan amount was below bank minimum, MCA starts at $15,000
Declined due to thin credit file, MCA is primarily bank statement underwriting

Do not refer applicants declined for fraud, active bankruptcy, or extreme NSF patterns. Those declines are usually valid for both bank and MCA underwriting.

Make the Introduction: While You're Still in the Room

The best referral happens immediately after you deliver the decline decision. The client is present, the need is live, and your offer of an alternative solution preserves the relationship rather than ending the conversation on a negative.

Use this script or adapt it for your style:

In-Person Script: After Decline Decision

"I want to be straight with you: our approval requirements around collateral [or: loan size, business age, credit history] make this one difficult to approve right now. That said, I know you have a real business with real revenue, and I don't want to leave you without options. There's a company I've worked with called T.A.G. Business Funding. They specialize in exactly this situation: fast capital for established businesses that don't fit bank requirements. Decision once your file is complete, no collateral required. Here's my link to get started; it's free to apply. They'll give you a term sheet before you commit to anything. Would you like me to send you the link right now?"

Follow Up by Email

If you made the introduction in person, follow up the same day by email with your referral link. This ensures the client has a frictionless path to apply even if they didn't act immediately.

Follow-Up Email Template

Subject: Alternative Funding Resource: As We Discussed Hi [Client Name], Per our conversation today, here's the link to T.A.G. Business Funding, the working capital resource I mentioned. → [YOUR REFERRAL LINK] No cost to apply, and you'll receive a term sheet before committing to anything. The funding provider sets the actual decision timeline after reviewing a complete file. I genuinely hope this helps. If your situation changes and bank financing makes sense in the future, please don't hesitate to come back to us. [Your Name] [Bank Name / Branch] [Phone]

Receive Your Referral Fee

When your referred client funds, you receive up to 2% of the advance amount within 5 business days. Track all referrals and earnings in the partner portal at any time.

Payment: ACH or check, your choice
Statement provided for each funded deal
Annual 1099-NEC for tax reporting
No minimum volume required

Average banker referral: $65,000 advance at 2% = $1,300 fee. Five funded referrals per year = $6,500 in additional income.

Colleagues talking across a white desk in a glass fronted office — Check your own institution’s outside business activity rules before any of this reaches a client.

Compliance Notes for Bankers

Banker referral arrangements are governed primarily by your institution's policy rather than external regulation. Key considerations:

Bank Bribery Act: Referral fees paid to employees of federally insured institutions must be structured carefully. Consult your compliance department on whether the fee should be paid to you personally, to the bank, or to a separate business entity.
CRA considerations: Referring declined applicants to alternative lenders may positively support CRA lending documentation. Consult your CRA officer.
Client disclosure: Inform clients of the referral arrangement. The email template above includes implied disclosure. More explicit disclosure can be added.

This is general guidance only. Banking regulations and institutional policies vary significantly. Confirm with your compliance officer before participating.

Banker Referral Guide: Step-by-Step

Review Your Institution's Outside Business Activity Policy

Register as a Partner

Screen Declined Applicants

Make the Introduction: While You're Still in the Room

Follow Up by Email

Receive Your Referral Fee

Compliance Notes for Bankers

Ready to Start Referring?

See If Your Business Qualifies