3 Things You Never Say to a Small Business Lender

2 min read • Oct 29, 2014 • Adam Shiflett

Getting approved for a small business loan can be difficult. Lenders have to be careful to invest in businesses that can actually pay back the loan. That means they are very sensitive when they even get a hint of something wrong.

Lenders use criteria such as time in business, revenue, credit scores and other factors to find good businesses, like yours, to lend money to. However, even if your business fits their lending requirements some small business owners turn off lenders by just saying some misdirected things. Here are a few to avoid:

Phrase to avoid: “How much can I get?”

This may seem like a very legitimate question from your standpoint. When a lender asks you how much you are looking for you want to know the limits you have to work in. But the lender hears something different.

Lenders want to know you have a plan to pay them back. In other words they want to know that the money they lend you will create a return that will improve your business and ensure they will get paid back. Asking how much you can get makes it seem like you have not thought it through.

Solution: Come to the lender with a specific amount in mind and know how it will impact your ability to grow and pay back your loan.

Phrase to avoid: “I have a great idea.”

You are an entrepreneur. Your currency is ideas. Ideas are what drive you and what makes you a success in your current business. Unfortunately, lenders don’t deal in idea currency, they deal in facts and cold hard cash.

Lenders get pitched ideas all day long. Whether or not they believe in your idea doesn’t have any bearing on their ability to offer you a loan. They answer to investors, depositors and the government regarding how they keep our deposits safe. That’s why they rely on facts like past revenue, credit score and time in business to determine your future performance.

Solution: Have your past in order. Make sure you have a way to prove your future performance based on past results. Back your new idea up with numbers by doing a little research and analysis.

Phrase to avoid: “No.”

This advise may seem like a strange, but it is very important. I am not trying to say you cannot negotiate or should not decline something that just doesn’t work for you. You need to make sure you get the best deal and that everything works for YOU, but you need to show that you are fully committed to the process of getting a loan by doing whatever it takes to get there.

Lenders are going to ask for a lot of information and it will feel uncomfortable. They want as much of a guarantee as possible that they will get their investment back and that means gathering important information. You are going to have to be open and honest if you want a loan.

Solution: Know what is going to be required of you. Review the contracts and offers before you get too far down the process.

Often we make small business lenders out to be the bad guys because we perceive they aren’t interested in helping us with a loan. They have an important responsibility to make sure their investment pays off. The things you say can derail an otherwise great relationship. Make sure you represent you and your business in the best light possible.


Adam Shiflett

Adam has a passion for telling stories with data. He has helped organizations identify opportunities to improve their business operations through collecting and analyzing data. He contributes concrete approaches that help improve businesses' performance and grow their bottom line.