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When you are starting your plan for the financing of your business, you should be prepared to take a few risks. You will find that you need to know how to conduct small business loan negotiations, businesses gone under being an occasional casualty. However, you need not worry too much about this as the worst case scenarios are usually not that common. Instead you should be focused on what it is that you can do to make the best small business loan negotiations.

Businesses gone under from poor planning and poor judgment are something that you can avoid early on in the game by knowing exactly how to negotiate. You will first need to identify your goal. How much money do you want to borrow? What is the minimum that you are going to need? How much leverage and collateral do you have, that is, what can you use as a negotiating tool to get you to where you need to be with the lender? As with most negotiations, you will want an exceptionally strong business plan, come in at a high asking offer after a great sales pitch, and then gradually make the necessary concessions for the deal. Be sure that you know what your worst-case scenario is; if you are not able to afford pledging your house or other large assets as collateral, make sure that you don’t do it.

This is the key to good small business loan negotiations; businesses gone under is often an aftereffect of poor planning that results in offering more than you actually have, getting involved with a rate that you cannot handle, or coming in with an over-embellished plan that is suitable for a business that is beyond your means. As long as you know your financial and psychological limits, you will have nothing to worry about when you negotiate your business loans.

This Business article was written by Mark Karavan on 1/26/2010