Obtaining a business loan is difficult at best, but there are things you can do to improve your chances of bringing home the cash. First you need to understand the motives of your lender. Lending institutions are business rums, just like you. And just like you, they're there to make money for their owners. So you can see why every business opportunity that comes their way has to pass a test for profitability. You can guide the results of that test by some preparation.

YOUR FIRST MEETING
Call for an appointment, dress your best, be on time, and come prepared to ask and answer questions. The purpose of this meeting is to explore the possibilities of a loan, not apply for the loan, so DO NOT bring a stack of financials. You want to go to this meeting with a check list to determine the institution's policy is on making your type of loan. Your task is to learn what factors they use in evaluating an application, exactly who will evaluate your application, how long it will take, whether you can obtain Small Business Administration guarantees, what their loan limits are, and anything else that might be important to your obtaining the financing you need. You might want to visit several lending establishments to see if one is more favorable to your needs. All banks are NOT the same!

DON'T ORDER A CREDIT REPORT
Ask the bank to NOT pull a credit rating at this time because you are visiting several banks and don't want to clog your credit report with a lot of inquiries. This does two things. The first is what it says, not clogging your credit report with a lot of inquiries. This shows up as a negative factor, so don't do it! Second, it lets the banker know you are serious, and he may have to work to get your account. Today, banks are looking for people like you!

BEFORE YOUR NEXT MEETING
Write a business opportunity plan. Follow the guidelines your lender suggests, but also read several of the many books on business plan writing you can find in your bookstore. Check out business plan software as well. Write a formal plan even if your lender says it's not required. Your write-up doesn't have to be elaborate, but it should cover all the points of a good plan including: company history, management review, current business, future plans, and all the rest.

CONSTRUCTING YOUR FINANCIALS
It's wise to hire a CPA to help you develop your financials. They are masters at this task, and will make sure you have left out nothing. In addition, they will lend an air of credibility with the financial manager of the bank. Make sure your CPA writes an analysis of your business based on financial ratios using the four basic categories of liquidity, debt coverage, leverage, and management. Where the lender might hesitate to lend to you if one of the many business ratios was low, the CPA could show that to be relatively minor in the overall evaluative process.

THE SECOND MEETING
Don't just walk in and dump your report on the table. Make an appointment to present your request. Take your CPA if you can. Make a formal or at least a semi-formal presentation. Slides and overheads are part of a formal presentation, but you shouldn't hesitate to use charts, graphs, pictures, testimonials, and other presentation tools to make your points. You're the one who has to convince the lender that you are a good risk. Do it right the first time! You'll probably be required to permit a credit report at this time.

THE NEXT STEP
Two or three days after your presentation call your potential lender and ask if he or she has all the information they need or want. Offer to make a formal presentation to the Review Board. Be eager to provide information or to clear-up a challenge.

IF YOU DON'T GET THE MONEY
Don't panic. Ask for an appointment to review the decision. Bring your CPA. The purpose of this meeting is to discover the reasons you were turned down with the aim of plugging those holes for the next presentation.

Your next step is to go through the same drill with another lender. Unless there is some glaring problem with your application (and your CPA should have already found this and cushioned it to some extent), another lender may find your application attractive. Keep trying. Even though it may be personally painful, you've got to keep trying if you're to succeed.