A bank loan is not the only option to finance your small business, but if at some point your small business  need to apply for a bank loan you should consider these top 10 tips. 

2.  Get An Outside Accounting Review:

You should seek the service of an accountant to review your financials.  This should be an outside accountant that you have not used in the past.  An outside review will bring fresh eyes that can give you an unbiased review.  The accountant can provide you advise on what to do in order to make your business more attractive to bankers.

3.  Give It Time: 

Don’t be in a rush to get before a banker make your pitch and get theloan right away.  Placing this kind of pressure on your self will lead you to make bad decisions and represent your business in a negative way.  Lenders can sense when you’re desperate to get approved for a loan.  A rush to secure the loan will give you less leverage.

4.  Practice, Practice, Practice: 

You have to make a convincing pitch to the banker in order to convince him/her to lend your business the money.  If you don’t practice your pitch you will show up and make a disastrous pitch which will end up in you not getting the loan.  Practice your presentation often until it becomes second nature.  Have someone step in to play the role of the banker and pepper you with questions.  You should be prepared to answer all questions forthrightly and convincingly.  Then you will be ready to apprach the banker.

5.  Have A Good Management Team: 

Having a good management team will convince a banker that the business will be well managed and hence, have an increased chance of success.  You have to be prepared to convince the banker that you have the right members on your team.  The members on your team should have industry and management experience.  If you’re the only member on the management team then you have to convince that you have what it takes to provide the management that is needed to make the company successful.

6.  Have A Back up Plan (Succession Plan): 

How will the banker get paid if you’re no longer running the company.  What if you got sick and have to take off for a few weeks.  How will the business continue to function and generate income so that it can pay off the loan.  You have to have a backup plan in place.  The plan should identify who will take over the business in your absence and continue to run it in your absence.  The loan must be repaid regardless of what happens to you.

7.  Know your industry:

You must know your industry.  Your banker will be very familiary with the industry that his bank lends money to.  You have to be prepared to answer any industry related questions and convince him/her that you business will succeed inspite of industry challenges.

8.  Be on time:

Be on time when you have an appointment to meet with the banker.  Be on time with your loan payments.  Also, demonstrate that you do pay your current bills on time. 

9.  Use Business Credit Cards:  

One of the things you can do to help improve your small business credit record is to get a small business credit card and start paying your small business bills under the business name and tracking your business expenses separately from your personal expense.  It shows that you’re serious about growing the business as a separate entity that can continue on it’s own into the future.

10.  Business Cards: 

Have your business card ready.  In your first meeting with the banker they will ask for a business card.  Prepare a good quality business card and have it ready.  Your business card should have your name and title as well as a phone number and email address that the banker will use to contact you.