Business lending made easy.

• Author: Louden, Dale
• Position: Indiana: Small Business Reference Guide - Brief Article

The saying goes, "You've got to have money to make money." No one understands that better than the person who owns his or her own business. And yet, for many owners of small- to medium-sized businesses, the concept of borrowing money is perceived as being too difficult, confusing and time-consuming.

The truth is there is no reason for a commercial loan to be a challenging proposition. In fact, it should be a fairly quick and pleasant experience, if you understand the process beforehand.

First of all, recognize your needs. There are many reasons to borrow and it is important that you have a clear purpose in mind. Perhaps you wish to purchase real estate or expand your existing facility. Maybe you are seeking to acquire new equipment or machinery, or to increase your current inventory. You could simply be looking to restructure an existing debt, finance your accounts receivable or provide cash to support your operating costs. Whatever your purpose, be sure that you can state it clearly.

Your next step is to gather the basic information any lender will need. Be prepared to provide your business tax returns for the last three years, your personal tax returns for the last three years, the latest income statement and balance sheet from your business and a current personal financial statement.

Now comes the really important step. Shop around. It is in your best interest to find the right bank that fits your needs. I would recommend that you talk to at least three different lenders. Remember, you're the customer and that means that you are in charge. You have questions and they should be able to provide you with the right answers.

During your meeting you should be able to get a sense as to whether they understand your business needs and objectives. Are they willing to partner...