How to get a business loan

As the economy begins to recover in some parts of the country, many of the the surviving businesses are facing a peculiar situation.  Having cut back, slimmed down and otherwise held on by whatever means necessary, these businesses now face a task I call 'surviving the survival.'
     With reserves drained, inventory down and staff laid off, how does a surviving business re-enter the markets they once served, now that the recession has drained all of their resources?
     In most cases, these businesses need to find bank financing, often in the form of a line of credit, or LOC, to buy fresh goods, get working capital to rehire staff and get business moving again.
     How do you get a loan when your back is against the wall, especially at a time when loans seem scarce?
     In my experience, the number one way to get a banker to listen to your needs is to show an uncommon knowledge of your business operations.  In lender meetings I have attended, the owner who can speak eloquently about every dimension of the business operations is the owner who moves to the next level in loan consideration.
     Do you understand, and can you explain in painful detail, the sources of your costs of goods or services sold?  Can you name your most profitable sales, your differential advantages and your critical market segments?  Do you know your competitors intimately? Can you describe your daily sales numbers and why they fluctuate?
     Thinking about applying for financing, a lease option or a line of credit?  Then sit down with your bookkeeper, your top salesperson, your operations assistant and your other sources of business expertise and study your business inside and out.
     Here are three recent readings that can also help you prepare for your first financier meeting:
     Boosting the Odds of Landing Business Credit
By Karen E. Klein on August 30, 2012
"How should entrepreneurs approach capital requests in this environment and what can they do to increase their chances of success?"
     SBA Loan Application Checklist
"Once you have decided to apply for a loan guaranteed by the SBA, you will need to collect the appropriate documents for your application."
     8 Ways to Clean up Your Business Credit Report
by Michael Lockwood on May 29, 2012
If you want to maximize your chances of getting your business approved for a business loan or equipment lease, ensure that your business credit report is accurate and complete, and do it very early in the process. Would you like to know more? Call Kevin, your accessible business adviser at (360) 447-8788

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