WHILE OBTAINING A loan may be challenging amid the current economic climate, you can increase your viability as a loan candidate by taking steps to prepare for that initial meeting with a lender.

First, be thorough when preparing documents a lender may request. These include: past financial statements and tax returns, a copy of your current note and payment schedule (if your business is already established), and a detailed business plan.

Your business plan should include:

• Executive summary: A critical introductory statement encapsulating the main points of the plan; a window into every facet of your business.
• Market analysis: A thorough overview of your industry, target market and competitors.
• Company profile: A summary of your company's industry and a description of the elements that will make your business stand out.
• Organization description: A description of your management and organizational structure, the marketing and sales strategy; a description of services or products and financial information, including the requested loan amount, your company's current and forecasted income statements, balance sheets and cash-flow statements.

In addition to preparing a comprehensive business plan, consider these strategies prior to seeking a small-business loan:

• Contact a financial advisor early. Consider cultivating a relationship with your financial advisor before you need a loan. By establishing a relationship early on, you can build a foundation the advisor can draw on later to make a determination about a loan.
• Research loan options. Find out which loan options will best suit your needs and be prepared to discuss these options when meeting with a lender. Will you seek a secured (collateral-backed) or unsecured loan, and what type of payment terms would best meet the needs of your business?
• Plan ahead. Anticipate the questions a lender may pose and have honest, well-researched answers ready. Decisions to lend are fact-based; don't be idealistic when answering questions and providing projections. Lenders will appreciate your practical perspective. It may also be wise to organize all of your documents prior to the meeting for easy access to specific items when requested and to highlight your meticulous attention to details.
• Lend to your venture. Amid the tightened credit market, managing risk is increasingly important for lenders. With this in mind, consider providing ample collateral or money toward your venture if possible. Your willingness to invest in your success may reflect added confidence in your plan.
• Preparation before meeting with your lender is key. The time and commitment you dedicate in advance may help increase your appeal as a solid loan candidate in this competitive market.

Joseph Benoit is the small business banking executive for Union Bank, N.A. Visit www.unionbank.com for more information.