While there are numerous financing choices for small and medium-sized owner managed business, ranging from asset based financing to factoring, most company owners are going to see their local banks first. The secret to dealing successfully with banks is to understand their thinking. Business owners and bankers are natural opponents. They are at opposite ends of the risk - reward continuum.
Owners are flush with dreams of growth and future riches.
Bankers are professional balloon busters. For them the glass is not half full, it is half empty and likely to go down even further. A business loan is a risky type of loan for the bank. While the owner's upside to a loan may be a surge in revenue and profit, the bank's upside is getting their money back plus a little interest. Business owners who look at things from the bank's perspective are better prepared to make a solid loan proposal.