Apply with the right person

When you enter a bank with the hope of being approved for a small business loan, find out what the job title is of the person that is helping you. Make sure they are not just a checking account representative that is taking the application because the loan person, or loan officer is at lunch or out that day. Ask them "Are you a loan officer? If the answer is no, I suggest saying "Who is and when will they be available?"

Don't let them off the hook on this issue. The employee will very likely try to assure you that their taking the application is fine. It is not! You have questions to ask and if they are not much involved in the details of credit day to day, they do not know what is in your self interest.

The business owner decides to get a loan

You are the business owner. You are driving down the interstate and see the advertisement from a major bank on a huge billboard that says they are the small business lender and you should see them.

You decide, "If they spend that kind of money on advertisements, they must really be making a lot of loans". This makes sense. You decide to go to the bank the next day and discuss a loan with them. The next day, you go to the bank, and eventually you speak with a loan officer. This person may well not be a loan officer. To your surprise, the branch you go to may not even handle business or personal loans anymore. It all now be centrally processed, and the branch is just the "front man" for the processing.

If you are in the branch asking for a business loan, this is very serious for you, & the staff there may not even be involved in your request when, as well as after you apply. If you apply at the branch, the person you are speaking with may not even speak with you again after you have applied.

Find out at the branch, do you all procure loans in the branch? Are you a loan officer? Are you going to handle this request?

Business Loans

Businesses go to banks with the belief that the bank should, and will loan to them. There is a huge gap between the number of businesses that think they will be approved and the number that actually do get approved.

The approval rate at major financial institutions is approximately as low as 5% to 10% for business loans. This is not a fact that banks want you to know. If customers knew this, they would be much more apprehensive and have a much more negative view of what their bank can do. Enter Marketing. Banks spend millions of dollars in advertising with such slogans similar to "Small business owner - meet small business lender". This slogan was used in the last years on major billboards in a large southern city.