Character: The bank wants to know that it is lending to a reliable business. So don’t be surprised if they fail to provide you with a loan on the day you walk through the door. If the bank knows your accountant it could speed up the process.

Ability: You need to demonstrate experience and your ability to carry on if things get tough. It is reassuring for a bank to hear you consider the possibility of sales being 20% below target so long as you can recover from it.

Margin: The bank will look for a margin over the Bank of England base rate. A shift in base rates is what affects your costs more than the margin, as margins are generally fixed between 1-3% above the base rate.

Purpose: You need to show a good reason for borrowing. Supporting losses is not generally acceptable (this is what equity is for), but a short period of losses – say six months – can be. Investment in assets, including stock and debtors, is the name of the game here.

Amount: Some bank managers object to funding a contingency, but others are more realistic. After preparing your spreadsheets, analyse and define where the money is going.

Repayment: You need to show that the funds will be repaid. The banks may be in business to lend money and some businesses seem to manage a permanent overdraft, but the underlying basis of a loan is that it should be repaid. If it is agreed later that the funds are used elsewhere in the business, then that is the sign of a developing relationship and increased confidence.

Insurance: The bank needs security. As ever, a property in the balance sheet or supporting personal guarantees will swing it. Banks are more cautious about security than other lenders. So tailor your approach and expectations accordingly.