Headed for the bank with a dollar amount in mind? It’s not a shoe-in for walking out with the money you need, but understanding the approval process is a great place to start. Not unlike choosing a fine diamond, here are the 5 C’s banks need to approve your funding request.

Character. Are you trustworthy? It’s the first thing the bank wants to know. Plan ahead so you can document your business experience and knowledge, personal and small business credit history, references and education. Your business plan is a good way to showcase your acumen.

Capacity. How well can your business support its debt? Your ability to repay the loan is a top priority. Bankers will want to review your cash flow or repayment plan to determine capacity. Be sure you understand your Debt Service Coverage Ratio (DSCR) – the ratio of cash available for debt servicing to interest, principal and lease payments. Anything above 1.2 is considered risky – that means for every $1 of debt you owe you have $1.20 to pay it.

Collateral. What will the bank own or have access to sell if you default? No, they don’t want that shiny new combine, but its value can help reduce the risk of lending. Make a list and true market value of equipment, real estate, inventory, account receivables, and securities you own.

Conditions. Your purpose in borrowing is a big factor. Share your business, operation and marketing plans that explain how the expansion will serve your business. Include income projections, industry trends, customer segmentation, and marketplace conditions that make your request valid.

Capital. What’s your own risk? Your investment into your company delivers a message loud and clear about your confidence in your business. Be sure to bring current financial statements – net worth and equity are key.

“Have a plan and work it,” says Pat Walker, the Northwest Arkansas SBA area manager. “Be prepared, be confident,” she says. “Refine your elevator speech and remember, first impressions count.”