Strategies for Getting that Commercial Loan.

• Author: BONHAM, NICOLE A.

Need cash to start up a new business, or to expand an existing one? The key to getting that loan is good credit and careful planning.

So you have a great idea--the best, fastest and most efficient widget ever--and want to take it from concept to the consumer. The only thing standing between you and entrepreneurial salvation is money. Start-up capital. Cash for equipment and operations, maybe even for commercial real estate.

Or, better yet, your existing business can't keep up. Demand is hot. The potential for growth is, in your estimation, immediate and potentially lucrative. Again, the key to a successful business expansion--cash.

And, a good working relationship with your banker.

Ducks in a Row

While commercial banks, such as National Bank of Alaska, First National Bank, KeyBank and Northrim are not your only funding source (Alaska also offers a number of credit unions, savings banks, even venture capitalists and angel investors), they are the standard route to address business lending needs.

The key to getting a bank loan--whether for a new or existing business--is going to the table organized, armed with the appropriate information and ready to sell your idea to the banker.

"It's key to have the basics in place and the common-sense things done," says John Scoblic, a commercial lending officer at National Bank of Alaska in Anchorage. "We really want to do what we can to help and to make the loan. The customer can help themselves by bringing us sufficient detail."

Typically, that includes a business plan, financial statement, projections, and sound credit history, according to Scoblic and other commercial lenders.

Plan Your Strategy

The business plan can be the single most important tool to securing a commercial loan. Surprisingly, Scoblic and others note that would-be borrowers frequently procrastinate in making that common-sense step.

"Most critical if you are a brand-new borrower is to provide some kind of a business plan--what you intend to do and how you intend to go about it," he says. Typically, the plan will help dictate the type of financing.

However, realistically, NBA rarely--if ever--sees a business plan right off, Scoblic notes. Some borrowers may call on the phone, outline the idea and set up an appointment where "we then send them away to essentially come up with a plan," he says.

In the small-business arena, assistance in constructing such a plan is readily available from the Small Business Administration, also Small Business Development Centers. For both new and existing business ventures, the key steps include: describe the business...