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If you’ve ever been turned down for a personal or business loan, it’s hard to remember that banks really are in the business of lending money. A number of factors drive loan-making decisions, but together they point to the same thing: the likelihood that your business (and you) will repay the loan based on the terms to which the bank and you agree and thus, how willing the bank is to make the loan. The more comfortable your lender is, the better your chances of getting the small business loan you need.

Be Creditworthy
Above all, your lender is most concerned with increasing their sureness that you’ll repay the loan. Your personal credit history and the credit history of your business are central to your lender’s evaluation. What they’re looking for is:

• The number of loans and kinds of loans you’ve taken out in the past and what you’re paying on now
• The amount of those loans as compared to your income, also known as your debt-to-income ratio
• How you’ve managed your loan payments—did you pay the loan back early, on time, late or not at all

While the numbers on your credit report may be difficult to argue with, they’re not the sole basis for loan approval. If extenuating circumstances like an accident, injury or illness, or divorce contributed to undesirable numbers on your credit report, be sure you explain your circumstances to the loan officer. Ask colleagues, former bosses and other professional acquaintances to write a letter of reference for you showing why they believe you’re worthy of a loan.

Understand Your Business’s Financial Needs
If you’ve written a business plan (cross link to How to Write a Business Plan), you have a good idea how much money you need, but before you make an appointment with a loan officer, you should also understand what kind of loan best meets your needs (a line of credit versus debt financing, for example), what repayment schedule supports your overall financial objectives and which banks may be able to offer you creative financing that help cut the cost of borrowing money.