We’ve written about bank criteria for lending to small businesses but there’s nothing like getting it straight from them. This is a summary of a great piece from Chris Nichols. To read the original post, click here.

1. Be clear what you need and why

Chris actually begins by noting the dearth of educational programs on how to get a loan. As he explains this first point, I thought about how much content is available on marketing and sales tactics. Getting a loan is almost the same. You’re marketing your business and selling the lending “opportunity” to the bank.

2. Underscore quality of the team

Chris spends a great deal of time on this point. In my view, it’s the single most important part of your pitch. External conditions may change. Your financial outcomes may differ from what you hoped. But when there is a strong and experienced team at the helm, the odds of surviving tough times go up exponentially.

I’d add one more point to Chris’s suggestions. Log into LinkedIn and beef up your profile and make sure everyone on the team does the same. It makes the bank’s job so much easier. Plus, it gives you a way to connect with advisers and mentors who can increase a lender’s confidence in the team. I routinely see small business owner profiles that are super lean. I assume that’s because they see LinkedIn as the place to look for jobs. Today it’s become a complete framework for proving all the points Chris makes about team.

3. Be prepared with transaction details

I’m just going to quote Chris:

Our common advice to companies is when talking to your banker, be ready to build a case why you are a good steward of capital. The business owner or management team that shows they have a well thought out plan for their business, quickly gains our trust.

4. Identify the risks!!

Make that, don’t ignore the possibility of failure. Again, Chris says it well:

This point is a little counter intuitive, but you are going to have to trust us on this one – tell us about why you might fail. As bankers, we are thinking of this anyway, so you might as well get this out on the table and lead the conversation. . . .  The more you identify the risks, the more confidence we have that you are prepared for those risks.

5. Close with timing and next steps

I know. Most business owners will assume the banker will drive the discussion of timing and next steps. But showing that you know and understand how this might play out or by introducing the subject, you show the banker you intend to be a partner in the process.

There are more nuggets in the original piece. Here is the link again in case you missed it above.

Just an additional comment on the author. Chris has become one of my most valued advisers. His insights into small business lending come out of years of experience working with thousands of community banks. Chris currently serves as Chief Strategy Officer at Centerstate Bank and also brings experience in crowdfunding for small businesses and financial services technologies.

Thanks for the insights Chris!

–LaVonne Reimer, Founder