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ans Serif">Choosing a bank to obtain a business loan is one of the most important decisions a new or existing business will make. A good lender relationship can sometimes mean the difference between the life and death of a business during difficult times. There have been cases where, other things being equal, one bank has called its loans to a struggling business, causing it to go under, and another bank has stayed with its loans and helped a business to survive and prosper.

ans Serif">Some banks will make loans to business start-ups and early stage ventures and others will not. Those that will not generally cite the lack of operating track

record as the reason for turning down the loan.

ans Serif">Choosing a bank
Before choosing and approaching a banker or other lender, the business owner should go through the following steps in preparing to ask for a loan:

• ans Serif" color="#7A7A7A">Decide how much growth the business wants and how fast growth will be, observing the dictum that financing follows business activity.
• ans Serif" color="#7A7A7A">Determine how much money is required and when it is required- to this end the business owner should:

ans Serif" color="#7A7A7A">1. develop a schedule of operating and asset needs
2. prepare a cash flow projection
3. decide how much capital is required
4. specify how the funds borrowed will be used

• ans Serif" color="#7A7A7A">revise and update the Business Plan for the business, including:
  1. the core ingredients of the Plan in the form of an Executive Summary
  2. a history of the firm
  3. summary of the financial results of the past three years
  4. clear descriptions of the market and products
  5. a description of the operations of the business
  6. statements of cash flow and financial requirement
  7. descriptions of key managers, owners and directors
  8. a rundown of the key strategies, facts and logic that guide the growth of the business.
• ans Serif" color="#7A7A7A">Identify potential sources for the type of debt the business seeks, and the amount, rate, terms and conditions sought.
• ans Serif" color="#7A7A7A">Select a bank or other lending institution that the business owner feels comfortable with and will be able to lend to requirements, solicit interest and prepare a presentation.
• ans Serif" color="#7A7A7A">Prepare a written loan request.
• ans Serif" color="#7A7A7A">Present the case, negotiate and close the deal.
• ans Serif" color="#7A7A7A">After the loan is granted, it is important that the borrower maintains an effective relationship with the lending officer.

ans Serif">Obtaining a loan is a sales job.
A business owner must sell himself or herself as well as the viability and potential of the business to the banker. Throughout meetings with potential bankers, the business owner must convey an air of self-confidence and an optimistic view of the prospects of the business.