FORTUNE Small Business:

How can I qualify for a loan?

An entrepreneur gets the dirt on impressing bankers.

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(FORTUNE Small Business) -- Dear FSB: If borrowing won't get any easier, then how will potential new small business owners go about getting qualified quicker?

- Cynthia Lee, Charlotte, N.C.

Dear Cynthia: Cash is king, says Rebecca Macieira-Kaufmann, executive VP and head of the small business segment at Wells Fargo (Charts, Fortune 500). "If you really understand your cash flow and what your needs are, you are going to do better at the bank."

When sifting through potential loan candidates, bankers look at the Five C's of credit: character, conditions, capital, cash-flow and collateral. For small business owners already in business, this analysis includes both personal and business credit history. An already-established relationship with a bank can speed things up, too.

For business owners who are just starting out, The Five C's also apply. Bankers will again look to see how much of yourself is invested in the business and if you already have some collateral, such as a building or equipment. Inform the bank of any previous experience you have in the industry and make sure the details are included in your stellar business plan.

Bottom line? Banks want to see that you have invested some of your own money in your venture. "Start with your bootstraps before borrowing from a bank," Macieira-Kaufmann suggests. To top of page

Got better ideas for raising capital? Write in here!

Related question: How can I overcome poor credit?
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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.