When should a small-business owner start talking to their bank about financing, and what should they do before they actually need a loan?

My recommendation is to start having conversations with your bank about lending opportunities well before you actually need the financing. There are many different types of lending available, and having those conversations early allows you to explore your options, understand the requirements, and be better prepared when it’s time to apply.

Having your financials organized and up to date is also extremely important. Most banks typically review two to three years of business and personal tax returns, along with current profit and loss statements, balance sheets, and business debt schedules. Depending on the type of financing, accounts receivable and accounts payable reports may also be required.

For newer businesses, particularly those exploring SBA financing, additional documentation may be necessary, including a business plan, financial projections, and the assumptions supporting those projections.

The biggest takeaway is to build a relationship with your banker before you need funding. A good banking partner can help you understand your options, identify potential challenges, and position your business for success when the time comes to borrow.