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Raw Deal

Evaluating what went wrong after being turned down for a bank loan

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This story appears in the April 2000 issue of Business Start-Ups magazine.

Q: Our sunglasses shop was turned down for an expansion loan. We're angry and don't understand what happened, especially since we have excellent credit.

A: Since your credit record is no problem, take a dual approach. One, get some fresh eyes on the problem. Contact your Small Business Development Center (http://www.sba.gov) and review your package with a loan counselor. And two, examine what went wrong. Stay calm. Don't apply elsewhere. Multiple applications can poison your credit report with multiple turndowns. Instead, call the loan officer and request a meeting. Reassure him or her that you respect the decision, do not expect it to change, and appreciate the time spent on your request. Say nothing that could be interpreted as anger or a threat-even by the most paranoid people.

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