Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

FORTUNE Small Business:

How can I qualify for a loan?

An entrepreneur gets the dirt on impressing bankers.

Subscribe to Top Stories
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)

briefcase_cash_open.03.jpg
Ask FSB
Get small-business intelligence from the experts. Here's a chance for YOU to ask your pressing small-business questions, and FSB editors will help you get answers from the appropriate experts.
Your name:
* Your e-mail address:
* Your city:
* Your state:
* Your daytime phone #:
* Your questions:

(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?
Photo Galleries
The best gadgets for your next business trip Hotels often lack the resources business travelers need to work efficiently. But fear not: These five gadgets will turn any hotel room into a temporary office. More
Must-have gadgets for business travelers For many business travelers, commuting through airports and enduring flights is the worst part of any trip. Thankfully, these seven gadgets help make life on the road -- and in the air -- much easier. More
Best cities for first-time homebuyers A recent Zillow analysis on the best markets for first-time homebuyers finds that the best deals are in the Southeast and the Midwest. More
Sponsors