The One Way to Make Lenders Fall in Love With Your Business

Business Loan love your bankerWhen you sit down and lock eyeballs with a lender across the desk, there’s one thing that will make sure that gaze is one of love.


It’s that trait that will make your lender want to take you home to meet Mom and Dad, and to open up those deep pockets to fund your business.

As one of the Five Cs of credit, Character is often buried underneath other terms like “Cash Flow,” “Capital,” “Collateral” and “Conditions.” But now Character might be the most important attribute of all.

Why Character Will Get You a Business Loan

What do banks and credit unions really want in return for giving someone a small business loan? In the end, there’s only one thing: repayment.

Collateral doesn’t repay loans, and good cash flow by itself has never payed back a single business loan. The only thing that will really repay a loan is the character of the borrower.

If a lender knows your character is the kind that will do whatever it takes to pay them back, you’ll likely get the capital you need.

In Bob Coleman’s book, “Money Money Everywhere But Not a Drop for Main Street,” Bob talks about how a large number of lenders give a disproportionate share of their hotel loans to the Asian-American community.

The reason is not about race. It’s cultural.

From years of experience, lenders have found that members of this community will work insane hours to make the business successful. And it’s not just the owners of the motels, either. It’s a family affair that includes uncles, aunts, grandparents, sons, daughters, nieces, nephews, cousins, and even the dog. If there’s a problem, lenders know their extended network will all chip in to help it become successful. And the numbers prove it. Coleman said loss rates among this group of people are infinitesimal.

Lenders know the Asian-American community will not give up. It’s that character trait the helps them get the capital they need.

“The number one character test bankers want to know is that you won’t give up,” Coleman said.

5 Ways to Show Lenders You Have Character

Your Turn

How else can you convince your lender that you have strong character?

It takes a little cash to change the world.

So what are you waiting for?

About the author


  1. Excellent article! I agree, character is most important because like you said, a person with character will do everything to pay back a loan.
    I am a retired teacher desperately trying to get funding for my indoor children’s play and swellness center promoting early childhood anti-obesity and healthy nutrition. I’m going to try my local banks in Howard County, Maryland area. It is a social entrepreneurial small business. Any ideas or counsel?

    • Thanks for stopping by, Sandra. Good luck with your business, sounds like a great organization. If it’s a non-profit, that can sometimes be difficult to find funding. Have you signed up for Lendio yet? I think we have one or two lenders in Maryland that might fit your situation.

  2. Its a nice article but is unrealistic. Banks require minimum standards like credit score and cash flow but they will not lend unless you have collateral, period. Even SBA loans have the same caveat. The banks simply use SBA loans to hedge their bets against loans they would make anyway. Banks also have a minimum lending amount-usually 150k so smaller loans are out of the question also. People of great character that have cash flow but no collateral will not get a loan. Character matters but only collateral seals the deal.

    • Thanks for commenting, bm. With collateral, that depends. From the banks I’ve talked to, if you have enough income coming in, they sometimes won’t require any collateral at all. In fact, that’s the exact discussion I’ve had with a lender about my own situation. They didn’t even ask about collateral.

      Also, on credit score. If you read the whole article, credit is a sign that shows you have the character to pay back a loan. So, yes, credit score is a huge part of it — and a huge part of the character equation.

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