Introduction: The CMR Score Roadblock
Imagine running a successful business for over a decade, only to have your loan rejected due to a minor technicality. This is exactly what happened to our client, an automobile dealer in Chennai. But with the right approach, we turned the rejection into a ₹5 crore approval. Here’s how.
Securing a Loan Against Property (LAP) can be challenging when credit issues arise. Banks heavily rely on the CMR (Commercial Credit Management) score, which typically ranges from 1 to 6 for good borrowers. A higher score often signals risk, making lenders hesitant. This case study demonstrates how we helped a Chennai automobile dealer obtain a ₹5 crore loan despite an initial rejection due to a high CMR score, highlighting the importance of a dedicated and meticulous approach.
The Customer’s Situation:
Our client, a 48-year-old automobile dealer in Chennai with an annual turnover of ₹2 Crores and 15 years in business, sought a LAP loan in February 2025. Despite a consistent history of inventory funding from 2016 to 2024, ICICI Bank declined his application due to a CMR score of 8. A CMR score above 6 often indicates irregular repayment patterns or minor outstanding dues, causing banks to flag the applicant as high-risk.
Uncovering the Issue:
Upon investigation, we discovered the “technical issues” were related to a few very small outstanding balances (₹10, ₹20, and ₹150) on previously closed loans. These seemingly insignificant amounts, likely due to a system glitch or a lack of communication between banks, negatively impacted his CMR score.
Despite his strong financial standing, this minor discrepancy caused the rejection. The customer was understandably frustrated, given his long-standing banking relationships and consistent repayment history.
Our Solution:
Recognizing the urgency of the situation, we immediately launched a full-scale credit audit to pinpoint all discrepancies. Our team took the following steps:
- Detailed Credit Review: We conducted a thorough analysis to identify all outstanding amounts.
- Clearing the Dues: We ensured these minor dues were paid off and updated in the credit reports.
- Strategic Lender Approach: Since ICICI Bank had already rejected the loan, we reached out to multiple financial institutions, including NBFCs and private banks.
- Customer Goodwill Presentation: We prepared a comprehensive financial report highlighting the client’s business performance, financial stability, and the technical nature of the outstanding amounts.
- Direct Lender Engagement: Our final step was to present this case to the head of the loan department at Jana Finance Bank.
A Successful Outcome:
Jana Finance Bank recognized the customer’s strong financial standing and approved a ₹5 crore LAP loan at a 10.5% interest rate for a 10-year tenure. The approval not only secured funds for business expansion but also reinstated the customer’s confidence in financial institutions.
“Initially, I was shocked by the rejection. I have always run my business responsibly, and this felt unfair. But with the right guidance and persistence, I finally got my loan approved. This will allow me to expand my business and create more jobs.” – Customer
Conclusion: The Value of Expertise
This case study illustrates how minor technical issues can lead to loan rejections, even for established businesses. However, with a thorough credit analysis, prompt corrective action, and a strategic approach to lenders, these challenges can be overcome.
If your loan application has been unfairly rejected, don’t lose hope. Reach out to us, and let’s work together to find the right lender for you.
