It is sometimes said that bankers, when reviewing a perspective loan applicant, think of the

drink “CAMPARI,” which stands for the following:

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• Character. As previously stated, bankers will consider the issue of personal integrity. Part of that

definition of integrity will include a sense of professionalism, which can be reflected in one’s attitude and

dress. Bankers will also review one’s history as a business leader, namely one’s track record of success.

This notion of character may also be extended to the upper echelon of the management team of a small


• Ability. The bank’s prime concern is with repayment of the principal and the interest of a loan. The loan

application should clearly demonstrate a business’s ability to repay the loan. All support materials should

be brought to bear to prove to the banker that the loan will not be defaulted on and will be paid in a timely


• Means. This refers to a business’s ability to function in a way so that it can repay the loan. Bankers must

be convinced of this crucial point. The best way to do this is by providing a comprehensive business plan

with detailed numbers that indicate the business’s ability to repay the loan. The business plan should also

include the business strategy and the business model that will be employed to convince the banker of the

validity of the overall plan.

• Purpose. Bankers want to know for what purpose the borrowed money will be used. You should never

request a loan with the argument that having more money is better for the business than having less

money. You should clearly identify how the money will be used, such as purchasing a piece of capital

equipment. Having done that, you should also indicate how the acquisition of the capital equipment will

positively affect the bottom line of the business.

• Amount. It would be extraordinarily inadvisable to begin a request for a business loan by saying “I need

some money.” It is very important that you specify the exact amount of the loan and also justify how you

determined this amount of money. As an example, you might want to identify a particular piece of capital

equipment that you plan to acquire. How did you determine its price? You should be able to address what

additional expenditures might be required—such as training on the use of the equipment. The greater the

degree of precision that is brought to this proposal, the greater the confidence the bank might have in

granting the loan.

• Repayment. This refers to demonstrating an ability to repay both the interest and the principal. Again,

detailed documentation, such as sales projections, profit margins, and projected cash flows, is essential if

you wish to secure the loan. It is important when generating these data that you try to be as honest as

possible. Extremely positive projections may be misleading. Worse still, if they are misleading and

inaccurate, it may result in the business defaulting on the loan and perhaps losing the business.

• Insurance. Even the most scrupulously developed sales and profit projections might not pan out. It

would be extraordinarily useful to show contingency plans to the bank that would indicate how you would

repay the loan in the event that the scenarios that you have identified do not come to fruition.

One should recognize that a good relationship with the bank can yield benefits above and

beyond credit lines and business loans. Bankers can serve as interlocutors, connecting you to

potential customers, suppliers, and other investors. A good working relationship with a bank can

be the best reference a business could have. This is particularly true in the current business

climate where bankers have significantly restricted lending to small businesses.


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