No. 1 - Do Your Homework: Estimate what you will need to launch or sustain your business —equipment and supplies, inventory, office or manufacturing space, franchise fee, etc. Consider what portion you can reasonably provide from your own resources (e.g., savings, contributions from family or friends). You don’t want to over-or underestimate your needs, but also don’t endanger your family’s financial security and relationships.

No. 2 - Consider the Options: Commercial banks are the most visible lenders to small businesses, offering a range of conventional loans, as well as SBA guaranteed loans. Small and mid-sized businesses do much better at community banks, according to the watchdogs of commercial banking. You can also look to venture capital firms, commercial finance companies, partnerships, etc. Be sure to learn as much as you can about the evaluation criteria and payback requirements for each.

No. 3 - Make Your Case Forcefully: Lenders will require a business plan, a resume detailing your education and practical business experience. They’ll want your credit history with references and specific loan documents. Develop your business plan with sections describing the nature and type of your business, available resources and how they will be used to meet specific goals, timelines, financial objectives, analysis of your competition and how your business will fit in the marketplace. Lenders may request cash flow projections that illustrate both the viability of your start-up and your ability to repay the loan. The data plan needs to be realistic and supported by facts.

No. 4 - Practice, Practice, Practice: Every request for start-up financing will involve some sort of presentation. Organize your thoughts and practice with people who will provide objective feedback. Fielding any and all types of questions ahead of time will build your confidence and prepare you for any issue that may arise.

No. 5 - Ask Too Many Questions: Talk potential lenders to death about their processes and loan expectations. It will display your interest and acumen, as well as inform you.

No. 6 - Create a Virtual Loan Package: For a Step by step digital guide to building a professional loan, go to: http://www.credentrust.com/pbo/scoresmallbusinesslendingcenter/index.cfm

To Recap: Small business owners need to understand the environment, appreciate that none of this should be personal, and they should have a good grasp of what they need, a plan to secure it and to repay it in a reasonable period of time. Reasonable loan requests are getting done, but businesses should understand that it continues to be a tough lending and borrowing environment generally.

Sources: Service Corps of Retired Executives, SBA Access.