If you own a business and you need money, who is the first person you call? Your banker. Most owners think that when they need money, they must need a loan or a line of credit. And therefore, they must call their banker.

However, this may be a mistake. You really need to understand your long term cash flow needs before getting a loan. By focusing on solving the short-term need, many owners paint themselves into a corner and eliminate (or at least really limit) their chances of getting financing later on. A loan or line of credit can paint you into a corner unless you know what you are doing.

When you buy a house, the bank that gives you a mortgage also takes first position on your house. When you get a business loan, the bank wants first position on your business assets. When you get a business loan, the bank will almost always file a UCC lien (also known as a commercial lien) that encumbers your business assets. Although getting a second mortgage may be easy in today