Get yourself in the best possible financial position before you approach a bank or other lender.

Here are some tips from www.business.gov.au on first class preparation to give yourself the best chance of success.

1. Set out a business plan

A well-thought out business plan and any attachments will set you in good stead. Ensure you have done enough research but be careful not to dump all the information into your plan – keeping it concise but with enough detail to motivate your lender will work in your favour.

What are your essential financial figures? It’s really important to know these. Your lender will be interested in your projected income, profit and expenditure; if you are purchasing an existing business, the lender will want to match up current and past trading figures. Run your figures past a franchise-friendly accountant before you finalise the presentation.

2. Understand what your limitations are

You will need to work out your limitations for finance and your ability to repay any borrowing. Consider the following questions:

• How much money do you require up-front and how much working capital?
• What is the maximum repayment you can afford?
• Do you know your Loan to Value Ratio (LVR)?
• If you need collateral, what assets do you have to offer?
• If you need a guarantor, who will be willing to guarantee your loan?
• How much equity do you have?

3. Be flexible

While a small percentage of franchised brands are accredited with one or more of the top four banks who can offer a higher percentage lend, many franchisors don’t have a shortcut to finance – unless they offer vendor financing. It’s worth shopping around to see what offers are available, and which lender will best suit your circumstances.

4. Dress to impress

When you visit your proposed lender, set a good first impression and adopt a professional dress code. It sets the tone and shows you mean business.

5. Rehearse

Are you a born public speaker or presenter? Most of us are not, so it’s best to practice your presentation before you attend your interview with a lender. This will help you appear more efficient, alert and confident.

Try to be concise and specific in your answers and deliver them in a professional and persuasive manner. You can role play an interview with an accountant to build your confidence in answering the hard questions.

6. Be prepared

Ensure you attend your consultation armed with all the information required. Some of the information includes your business plan, key financial statements for the last three years (if available), financial forecasts, ratio calculations and personal financial information for each business owner.

Check with the lender to see if there is anything specific to bring along.

7. Read the small print

While it pays to be flexible when searching for finance, if you find a much cheaper lending option that sounds too good to be true, find out why it’s cheaper.

Are the fees higher? Does the interest rate change at any point? Is it from a reputable finance provider? What happens if your LVR gets too high? It’s also a good idea to run your options past a business advisor or accountant before signing anything.

8. Handling finance refusal

Unfortunately not every financial application results in a successful outcome. There could be a number of reasons why an application is rejected. Check here for ways of seeking feedback, making changes and aiming to overcome this refusal next time.