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Wow Your Banker-Small Business Loan Tips

As a small business owner, it can be somewhat intimidating to go into the bank for the first time looking for a loan.

As a small business owner, it can be somewhat intimidating to go into the bank for the first time looking for a loan. It might even feel like you have to beg and plead your case for why the bank should even lend you money. Not only that, they will practically make you sign your life over. Well, banks act skeptical for a reason. They are not playing with their own money and there is always someone watching to make sure they are being responsible with commercial lending

Bankers love when a small business owner is organized. This usually means by coming to your first meeting prepared and with a plan. This should make sense, it shows that you have thought through the process and have actually done some thinking about how borrowing this money is going to improve your business. So, you should show how purchasing a new facility will save you money in other ways. If you are applying for a line of credit, show how buying in bulk and getting a discount will effect your business. Or perhaps show the bank that by purchasing a new piece of equipment will win a new contract with a prospect and will pay for itself. This is a great way of showing your banker that you have thought about how you will pay back the loan. In other words, you do not have some sort of 'build it and they will come' mentality.

Strange as it may sound, most small business owners do not do these things. They come into a meeting and try to 'prove' to the bank that they are worthy of the loan because they have always paid their bills in the past. That might be ok for a small loan, but when you get over even a few hundred dollars a month, banks get a little antsy if your financials don't indicate you would be able to repay. This makes bankers a little uncomfortable. Now, if your company financial statements show that your company can support a prosposed loan payment, then you are in the clear. But, if that's not the case, then be prepared to make your case to your banker. Its a good idea in the long run! Dave Roth runs http://www.small-business-finance-tips.com which is a site devoted to educating small business owners on financing options. The site includes information on startup business loans, commercial mortgages, and business lines of credit . Dave worked as a small business loan officer for many years and now owns and runs several retail locations in Illinois.