As a small business owner, you are all too aware of the expense that comes with running your own operation. As time goes on, you may find yourself in need of a cash infusion for a variety of reasons. Perhaps you need to do some renovations or you need some capital to fund a new product or service you are hoping to offer. Banks today are stricter than ever when it comes to lending money, whether for personal or professional needs. While there are no guarantees, there are some steps you can take to maximize your chances of approval.


Get Expert Advice

It never hurts to seek out the guidance of people who know more than you do about the particular task you are trying to accomplish. In the case of getting your small business loan approved, seek out guidance from your local Small Business Association (SBA) office or Small Business Development Center (SBDC.)Here you can consult with experts who can help guide you through the loan process and suggest the strategies that are most likely to work in a time when banks have really tightened the purse strings on small business loans. These organizations also offer lots of free information in the form of seminars, events, books and other publications.

Research Potential Lenders

When you decide to apply for a loan, do not just head to the first bank you come across. It is easy to assume that all lenders would be equal in the process as they are all performing the same function of giving you money. But, certain lenders may be more amenable to your request than others, such as those that deal a lot with other businesses in your industry. Some people find they have better luck with a community bank rather than a large national bank since a local bank is more likely to be familiar with your business. In some instances, a non-bank lender may be your best bet. If you think there are weak spots in your application that would make a standard loan more difficult to obtain, look for banks that participate in SBA-guaranteed loan programs.

Be Prepared

Many small businesses fail to get the money they need because of poor preparation. You need to show lenders that you are a low-risk proposition and this requires careful preparation of your documentation, and a business plan outlining your financial situation and how you will pay back this money. Any business presents a risk, and failure to discuss how you will deal with these potential problems ,while still making good on your loan may suggest to the lender that you have not thought this through. You need to show the lender that you have given careful consideration to how you plan to use this money and how you plan to pay it back. Be able to back up every claim you make in your application. If you do not have the documentation to illustrate a particular financial claim, do not make it.

What to Do if You are Rejected?

If you are rejected for your loan, not all hope is lost. There are companies out there offering alternatives, but you must tread carefully. One such option to consider is a merchant cash advance, where a company fronts you the money you need and takes repayment in the form of taking a percentage of your future sales until the principal of the loan and interest are paid back. Going this route can usually get you the money in a matter of days, but when choosing a company, it is vital to have a full understanding of the interest rate, the method by which they collect the money—for example, some may take a certain percentage of sales daily — how long you have to pay it back and any other fees associated with the advance.

Kelli Cooper is a freelance writer who covers all things business.