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The Business Plan Kit:
For Entrepreneurs

Tips for Winning the Banker's "Yes"

By George Dawson

A bank would rather say "no" than hurry. Start your loan application well ahead of when you will need the money.

Pick a bank interested in your kind and size of business, not a bank interested in just your kind and size of loan.

Answer all the banker's questions. You can't give a banker too much information. A strong flow of information reduces the tension between the banker and the borrower.

Ask for what you need. Everything is negotiable until you find out it isn't. Agree to something now in return for a future concession.

Be professional. Avoid confrontations and threats. The bank doesn't care, and the loan officer has little to lose.

Don't automatically object to loan terms and conditions. Instead ask for explanations. Find another way to satisfy the bank's concerns. You can always fight later.

Don't negotiate your interest rates up front. Draw the banker into wanting to make your loan. Then work to improve the offered rate.

Get the loan officer out to see your business early in the loan application process. Plan a great show-and-tell. Introduce your key people- especially the financial types.

Clean up your personal and business credit reports before applying. The single biggest nonfinancial consideration in a loan is your character - your willingness to repay.

"Bullet-proof" all the assumptions underlying your cash flow projections. The single biggest financial consideration in a loan is the reliability of your business cash flow.

George M. Dawson - a business financing consultant (210-366-4076) and author of "Borrowing to Build Your Business; Getting Your Banker to Say 'Yes'" (800-594-3943).

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