Seven steps to winning a small business loan.

• Author: Zippwald, Rachel
• Position: Private companies

Private companies--like all enterprises striving to grow during a sluggish economic recovery--are looking for help when it comes to financing their businesses. They may be in for a bit of luck. Small Business Administration (SBA) loans are available. And, while it might take more work to obtain one today than in years past--due to the amount information banks currently require--the following seven steps can help create a successful SBA loan application.

1. Provide Details on Exactly How Much is Needed and How it Will Be Used. Banks like specifics, so be prepared to provide a precise dollar amount and give details of how the funds will be used. For example, if seeking $125,000 to expand the business, explain to the lender how the money will be allocated, for instance, using $75,000 for working capital to support three months of expenses and another $50,000 for seven networked computers and a server.

   Banks are impressed by research, so provide a written quote for the equipment. If planning to consolidate debts and refinance for a longer term, provide copies of promissory notes and state how much can be saved through the refinance. Detailed loan amounts with copies of bids, promissory notes or proposals can help strengthen the loan package because the lender can understand the facts backing up the request.

2. Provide Information About Company Management. When banks lend money, they like to understand who runs the company and be familiar with the managers' backgrounds. This is a key factor in presenting the loan for approval.

   Help your lender by providing a resume for each owner or key employee and describe their functions and responsibilities. If certain key positions have not yet been filled, include a thorough job description of the type of person being sought. This will confirm for the lender that needs have been analyzed and position requirements have been determined.

3. Be Prepared to Offer Collateral. The SBA requires collateral to fully secure a loan, to the extent that it is available. If the applicant owns a home, the SBA will ask that it be pledged, it may also request a lien on business assets and may require life insurance on sole owners of a business. Most loans made by banks are secured loans. Therefore, approval may be contingent on a guarantor who is willing to offer collateral.

4. Detail Your Credit History and Credit Score. Credit score is an integral part of the loan process because it illustrates the ways in which other...