The biggest reason most otherwise successful business people fail in their dealings with banks is that they are just not speaking in a language banks understand. Lenders speak a language that is foreign to the average company owner. This language is based on numbers and it uses these numbers to tell a story.
You can have the greatest story in the world, but if you are telling it to me in German and I speak only English, I am just not going to get it, much less be excited about it. Talk to the banker in language he or she understands and, most importantly, recognizes and respects.
When you put your financial information together what kind of story did it tell? You or your accountant probably rounded up the company's annual financial statements for the past few years along with an interim statement and submitted these to the bank. Unless you are in an exceptionally strong financial position (and if you are, you would not be applying for a loan), the information you give the bank is probably not enough to tip the scales in your favor as far as the loan committee is concerned.
Have you ever thought of why you never get a chance to meet with the loan committee? It's not because they are too busy. It's because the bank doesn't want non-financial issues such as people and personalities to cloud anybody's judgement. Your financial information has to stand alone. You are judged on your financial performance as you have given it to the bank. Period.
You can legitimately make the story you tell the bank substantially stronger by doing two things. The first is "recasting" your previous years' earnings; the second is including pro formas in your loan submittal package.
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