Tips on Getting a Business Loan in Tough Financial Times

If you are considering a business loan for a startup or expansion, you are probably wondering if the current credit and financial situation in the U.S. and elsewhere will affect your ability to get money. The answer, in general, is "yes." I have talked to people who are in the process of getting loans, and I also have a couple of bankers I talk with, and they all say that money is still available but it is more difficult to qualify for a business loan.

Here are some tips to make the business loan process easier and your probability of getting accepted higher:

1. Get your personal financial papers together and make sure your credit is impeccable. Prepare a personal financial statement to show the bank. Get a credit report and check it. If you can raise your credit by eliminating old problems or errors, do it. Banks are requiring higher credit ratings now, so make sure you get yours as high as possible.
   
   
2. Limit your expectations. The smaller the amount of your request, the better chance you have of getting it accepted. Go through your list of "must-haves" and pare it down to only the essentials. You can live without paintings on the walls for a while, can't you? You may have to wait for some purchases until you have the cash flow to pay for them, but you'll definitely improve your chances for a loan this way.
   
   
3. Create reasonable income estimates. Many business people estimate income high in order to impress the banker, but this only detracts from your credibility. Show your banker a worst-case scenario, so he/she can see that you will succeed even if your don't have lots of income.
   
   
4. Be VERY Prepared. Make sure your business plan is complete and error-free. Practice your presentation. Know your numbers and be able to defend them. Be able to answer any question asked, including "How much can you give as a down payment? What collateral do you have for this loan?"
   
   
5. Don't Stop with One "No." You will need to go to more banks to get a "yes," so line up several banks and talk to all of them. You'll improve your presentation as you go, and you will improve your chances of getting a loan from one of them.

I would be happy to help you with support and general information as you go through this process. Post a comment in the forum and I will respond.