Small firms can improve "lendability," expert says

As the serious implications of the credit crunch begin to sink in for owners of small firms, an expert has offered advice for how to improve the chance of getting approved for a business loan.

Writing in the Aspen Times, Charlie Bantis of Vectra Bank Colorado suggests that owners look to boost earnings and cash flow by arranging automatic debits with vendors.

At the same time, he recommends that firms seek to reduce their debt level, as well as cleaning up the company's credit profile by settling any outstanding judgments and paying back taxes.

In this time of tighter lending criteria, business owners should look at enhancing their personal credit ratings as well, Bantis says.

"Enhance personal cash flow with income independent of your business. This will give you the ability to leave cash in your business, if necessary," he explains.

Recently, business brokerage owner Alex Vantarakis told the Dallas Morning News that smaller organizations have been facing more problems obtaining working capital since the beginning of 2008.