Insufficient funding is one of the main reasons why 80% of businesses fail in the first year and a half. As a business owner, not only do you have to cover all operating expenses, but the time and effort required to become successful means you will almost certainly have to say goodbye to your day job and regular paychecks. Unless you have saved enough to pay everything for at least 18 months, you will probably have to find other sources of financing.

However, here we run into another problem. A recent survey cited by the Credit Union Times showed that only about a fifth of small business owners — about the same rate of successful businesses, by the way — rely on a small business loan. The survey showed that 62% were afraid to take out a loan and nearly a quarter of those surveyed thought they would not be approved for one. HAS The Harvard Business School Working Paper by Karen Mills (Administrator of the US Small Business Administration until 2013) showed even more discouraging statistics. Banks continue to apply measures that restrict lending to small businesses since the financial crisis hit, as such loans are generally always riskier than those to large businesses. Loans that are $1 million or less, the domain of small businesses, are down 21% since 2008. These loans accounted for half of all bank loans in 1995, but only 30% in 2012.

So what can you do to give yourself a better chance of getting a loan?

As the saying goes, “The devil is in the details.” Given the stricter requirements of the banks, he will have to come up with a very convincing plan that shows that his business will actually make a profit. Every number presented must be supported by solid evidence or at least some realistic projections backed by in-depth research. There should also be a clear plan for where the money will go and how it will influence the success of your business.

Aside from this, all of your personal finances will also be scrutinized, so make sure your taxes, mortgages, credit cards, assets and liabilities, and even your credentials are spotless and in order.

The bottom line is that if you believe in your business idea and do the necessary due diligence to put together a solid budget and business plan, there should be no reason to be denied a small business loan. If not, he may want to reconsider quitting his day job.