Top 5 Suggestions to Get a Business Loan

In the last few years, all we have heard is how banks are no longer lending to small businesses. Well, if you still believe that, you may want to change your opinion. In July of 2012 the Wall Street Journal said that commercial lending was up 14% over the same period of 2011. I think that is very encouraging news. (Please see WSJ article on page 1 of the Money & Investing section 9-14-12 issue.)

More recently, in the 11-26-12 issue of the WSJ there was an article telling us that commercial lenders at smaller banks are in demand and wages for that employment sector is up 39% since 2008. That is a significant increase. (Please see WSJ article on page 1 of the Money & Investing section 11-26-12 issue.) The article goes on to say that commercial lenders are in demand and that many smaller and regional banks are looking for more lenders. If you understand the laws of supply and demand, it means that banks want to make loans to smaller businesses. Again, this is good news to those of us with a business that needs financing.

So here is the question for you; how do you take advantage of this seemingly recent improvement in the commercial lending arena? Here are my top 5 suggestions to getting a commercial loan.

• Be sure that your credit is in good shape. This is true for your business as well as you personally. Pay your bills on time and do not overextend yourself or your business.
• Keep your records in exceptional order. This is a must! If you want a new loan, the bank will want to see copies of your historical financial information and copies of your tax returns. The lender will also want to see how you are doing with your personal finances.
• Don’t milk the company’s cash position. Just because you have money in the bank, don’t go out and blow it on something new that you can get along without. Keep enough cash in the account to be able to cover several months of bills. Remember that “cash is king”.
• Have a current business plan. This is a plan to let your commercial lender know that you are thinking about the future and where the business is going. This should include things like a marketing strategy, budgets and projections and an assessment of you staff, management and various processes and operations.
• Maintain good relations with employees, customers and suppliers. Bankers can be real snoopy sometimes. They may call several individuals to see how they are treated. Besides it is just good business to take care of your own.

There are other things you can and must take care of but there is no more room. If you will tackle just these 5 things you will be amazed at how “easy” it will be to get the funding you need to grow and expand your business. Good luck.

Randal Roberts has over 30 years of commercial and international banking experience. He has helped more than 2,500 different companies with their businesses. He is willing to help you find the resources you need to start your own business or improve the one that you already have. Visit http://www.accelfs.com for more information.