FORTUNE Small Business:

Will small business borrowing get easier?

No time soon, says FSB's experts, but there are ways to increase your odds of getting a bank loan.

By Rich Russakoff and Mary Goodman
Bottom Line Consultants, Richmond, Va.

(FSB Online) -- Dear FSB: I have built a successful brand in the optical arena. With entrepreneurship becoming the fuel for the U.S. economy, do you think the criteria for granting business loans will change? Could it shift from being FICA-score driven to being more collateral based, with more emphasis on the applicant's business, professional credentials and history?

- Faith Smith, CEO/Founder, Eye Cream Shades, Inc., Irvine, Calif.

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Dear Faith: Regardless of the economy, entrepreneurs are risk takers and bankers are conservative. Lenders want to make "safe" loans, and virtually all of the major ones rely on credit scoring systems. That is unlikely to change in the immediate future.

How can an entrepreneur increase her odds of winning a loan? There is only one tried-and-true way: proving to a banker that you are very likely to pay it back. Before you apply for a loan, check your credit history and correct any errors that could derail your application. Emphasize the factors that will win a banker's attention in your application.

Bankers like to lend money to businesses in which the cash will have an immediate and positive effect on the venture's financial health. They'd be very unlikely to loan money to bail a company out of a situation such as unpaid back taxes.

Bankers also want to see a balance sheet in which there is enough collateral to minimize their losses if you can't keep up your payments. Continued profitability is essential. So is growth - but not too much. Bankers want to know that you have the experience to manage the company at its current pace, without losing control.

Having credible financial documents is important. Audited financials are always a plus if you run a substantial-sized company.

An impressive management team can also be a plus. If you have well-regarded professionals helping you to run the company or on your advisory board, mention them.

Shop until you drop. Bankers are service professionals. They will respond to competition by offering better deals.

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