Getting a loan after bankruptcy

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(FORTUNE Small Business) -- Dear FSB: Unfortunately, I have a bankruptcy due to a divorce. Is it possible to obtain a business loan if I have re-established my credit score?

- Peter in Hillside, Ill.

Dear Peter: It's not out of the question.

"It depends on the lending institution's criteria," says Jennifer Crandall, a small business credit expert with Community Credit Counseling Service, a Denver nonprofit credit counseling organization.

The industry you're in can also affect your chances.

"For example, it can be extremely difficult to get a loan for a restaurant startup because of the high failure rate," Crandall says. "But if you have a very stable business that's been running for a couple years, it's easier."

"You're going to want to be prepared for questions," says Melinda Opperman, vice president of community outreach for Springboard, a nonprofit credit-counseling agency with offices throughout southern California. "You want to do what you can to take the sting out of the bankruptcy."

One way to do this is to draft a letter of explanation, presenting your unique circumstances.

"Relate the simple facts of the divorce and the bankruptcy," Opperman says. "Leave out the emotional and derogatory comments. That kind of thing is often viewed as not very reasonable, and lenders will give your case less weight."

Have your letter of explanation ready to give to lenders and have a brief, "elevator pitch" version ready to delivery verbally. In addition, there's a place on your credit report where you can add a 100-word explanation of your circumstances. You can remove that statement at any time - unlike the evidence of your bankruptcy, which will remain on your record for seven to ten years.