Your company has a promising future. You’ve worked hard, made smart choices and navigated through the challenging economy. What you need now is capital. With a tougher credit environment than in years past, you may be wondering about the best way to approach a lender and what you can do to ensure you are presenting your business in the best possible light.

The good news is many lenders are actively seeking new opportunities to put their money to work. While not everyone seeking a loan will receive the financing they are looking for, there are ways to increase the likelihood of success. So, what do the smartest borrowers do that make their quest for capital more successful?

How a company presents itself to a lender is critical, and there are many factors beyond a company’s cash flow and credit history that have a big impact on the outcome of their loan application.

While every situation is unique, here are 10 tips to help borrowers be more successful when applying for credit.

Reach Out Early To a Lender
What is the right time to approach a lender? The best time is before you need capital. By bringing a lending officer on board early, he or she can become a better advocate for your business. Putting time and effort into building a relationship and educating your potential lender about your business prior to applying for a loan can have a big impact. The more a lender knows about you and your business, the better input they can provide to their underwriters. If you wait until you need money in a hurry, you may have limited your options and those of your lender as well.

Treat Your Lender as a Strategic Supplier
Relationships matter a lot. You and your lender must see each other as business partners, with many shared goals. That means taking the lender’s perspective into account in your discussions. Smart borrowers come to the table with an understanding for both sides of the equation and with the mindset of finding two-sided solutions when financing challenges arise.

Truth Trumps: Be Transparent
Trust underlies all credit relationships, so you must be upfront with your lender about your challenges. You may think negative information or a troubled financial history will eliminate your chance for a loan. Not so. The real loan-killer is having the lender invest time and resources on your account only to find that the information you’ve provided is materially different from what is discovered during the underwriting process. The smart borrower sees financing challenges as an opportunity to demonstrate their grasp of the issues facing their business and to suggest win-win financing solutions for both parties to consider.

Tell a Compelling Story
Every business has a story. Tell yours in a way that highlights successes but also acknowledges challenges. Create a forward-looking business plan that adds breadth and depth. Also, organize your financials and be sure they align with the narrative. Your presentation doesn’t have to be perfect, just honest and complete. Lenders understand the impact of the downturn on businesses. What they need to see is how you overcame obstacles and solved problems ― and how you plan to move forward.

Sweat the Small Stuff: Get Your Documents in Order
Every interaction with a potential lender carries a lot of weight. Mistakes, even if they seem insignificant, can cause the lender to lose confidence in you and your business.

Understand key terms in your covenants, contracts and credit documents, even those that originated with other lenders. Also, show that you will meet your commitments. One effective way to facilitate the process is to put a cover letter on your business plan that includes important dates and obligations.

Find a Lender Who Understands Your Industry
An industry-savvy lender can be an invaluable advisor and an advocate in the credit approval process. Due to their experience in your sector, he or she will have a better understanding of your business plan, position in the industry and the challenges you face. That knowledge will also be helpful in structuring your financing and maximizing the credit available to you.

Communicate, Communicate, Communicate
A lack of communication can kill your loan. From day-to-day details to big changes, keep your lender informed. If an unexpected event occurs ― say, a key executive resigns suddenly or a manufacturing facility experiences a disaster ― contact your lender as soon as possible, preferably before it hits the news. Be sure to adequately explain both the issue and any impact it may have on your ability to meet the obligations of your loan agreement. Advanced warning will build the trust that underpins a productive lending relationship and will allow your lender to be as flexible as possible as your company works through its challenges.

Think Like a Lender
Thinking with both a borrower and a lender mindset when considering a critical discussion with your lender will help you to get the most out of the relationship. Whether you’re seeking increased credit or disclosing a new challenge, understanding what your lender must evaluate will help you to have a more fruitful interaction.

One example is the growing trend to “amend and extend” credit, which can be complex and somewhat time-consuming agreements to work through. Smart borrowers understand these dynamics and have the foresight to contact their lenders to start those conversations 18 months before their loans come due.

Know the Financing Structures of Your Peers
Learn about the financing structures of peers in your industry. By taking the time to do your homework, you can improve the discussion with your lender and improve the chances of creating a workable financing solution for your business. While a particular peer’s structure may not work for you, it may be a great starting point.

Optimize Cash Flow
Cash flow is king. Your lender needs to understand all monies coming in and out of your business as well as your payment history and that of your customers. Better yet, show your lender exactly how you are working to increase cash management efficiencies.

With careful preparation, borrowers that work in a spirit of collaboration with their lenders can boost their chances of success. Borrowers should look to their lenders to be flexible, have enough capital on hand to support them through both good and tough times, and have the industry expertise to understand the true value of the collateral used to secure loans that will help to maximize the amount of financing they can extend.

For well-managed businesses, there is plenty of capital available, but in today’s environment, it’s more important than ever to present you and your company in the best light.

© 2010 General Electric Capital Corporation. All rights reserved.