A bank won't look at a company without one. A borrower's next step should be to get comfortable with approaching lenders. It may take talking to more than one bank to secure a loan, so role playing with a consultant helps. Banks possess a forbidding mystique that can intimidate even the most experienced business person, say the experts. Once a businessperson walks in a lender's door, he or she has the responsibility of selling the business's concept.
Lenders speak a language foreign to the average company owner.
This language is based on numbers and it uses numbers to tell a story. Woods points out that borrowers don't get to meet with a loan committee because a bank doesn't want non financial factors such as people and personalities to cloud a decision-maker's judgment. A decision to lend is based as much on numbers as possible. One way a business can strengthen its story is to recast its financial statements to show what the business could have earned in a given year, suggests Woods. Businesses generally try to minimize taxes, which are based on income, so they try to keep their income as low as possible on paper.