5 things you should know about getting a small business loan: insights from a banking executive to improve your odds.

Author:Brown, Carolyn M.
Position:Small Biz

MAYBE NOT EVERYONE AT your local branch knows your name, but you definitely want to do business with a bank where you already have a solid banking history if you want to apply for a small business loan. As an entrepreneur you want to make sure your bank has small business bankers or small business specialists on board. It should also offer products that meet the needs of your business.

Generally, business owners already have a personal relationship with their bank. So, if you already have a credit card with that bank, a lender can see how well you manage your account and your finances. "You are not tied to that bank if they do not have a robust products set or they can't meet your needs," says Michelle Y. Lee, executive vice president and northeast regional president for Wells Fargo. In that case, "Look elsewhere. You may want to move your personal relationship to another bank as well. All of this benefits you in the long run--the more business you bring to that bank," adds Lee.

Lee is responsible for more than 770 branches, nine business banking teams, and approximately 8,500 team members. In today's environment when they're deciding whether or not to approve a loan request, what do bankers look for particularly?


1 Most important is the perfect credit profile for the business owner and the credit profile of the business if it is already established. "It tells the bank a lot about that person. It tells them beyond what their payment history is like. The credit profile provides a lot of insight in terms of how you run your business," says Lee. It also will provide some insight into the types of difficulties you have had and into your credit needs.

2 Positive feedback from vendors or your customers is...

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