As business begins to pick up again and distributors look to next year to find growth in new places, they’ll need capital behind them. After all, without financing and cash in the bank, there’s no way to keep up with a rapid growth rate.

The time is now to set your company up to get a loan if you need one – and to determine exactly what investments you’ll want to make with that money. Indeed, distributors right now should plan not only where their capital is going to come from, but also what capital investments they need to make to ensure their businesses are prepared to handle growth next year.

The American Express OPEN Small Business Monitor reported that a full 33% of the 734 respondents said they plan to put off purchases (up from 21% two years before), while those planning to get a short-term loan is down to 4%, from 14% two years before. The data indicates that business owners are waiting for business conditions to stabilize before they move on more serious investments. But experts suggest that distributors with an eye toward the future consider taking action sooner rather than later, planning investments or seeking out loans early to ensure they are prepared for a turnaround.

“Businesses that are able to are starting to prepare for what will hopefully be a rebound in the not-so-distant future,” says Alice Bredin, small business advisor to American Express OPEN. “Everyone’s going to be looking to snap up customers, so if you can’t meet demand, or if you fall short, there will be a competitor [who can fill the void].”

Some distributors have already begun reaping the benefits of investing while business is slow. Steve Levschuk, president and owner of Talbot Marketing (asi/341500), had a difficult 2009, with sales down in a number of channels. But the company used that time to make some long-term investments in its business, among them replacing its ERP operating system, which Levschuk is now grateful he did.

But once a distributor decides to make a significant investment, the next question is where he or she should look for loans. Joseph Perri, executive vice president of Just Call Inc. (asi/237905) bucked the credit trends by getting a loan from Wells Fargo earlier this year, which provided him with the capital to buy a 4,200-square-foot building for office space and storage at a great price. “I had heard the war stories: ‘banks are not lending money,’” says Perri. “But I said, ‘what do I have to lose? All they can say is ‘no.’ I sat down with them, and told them what I was doing, and I was shocked at how fast the process was.”

Perri’s success in acquiring a loan may be due to his longevity in the marketplace—Just Call Inc. has been in business 22 years and has had strong sales for every one of the past seven years. Jim Smith, CEO of YCHANGE, which offers consulting to small businesses, says that these strong numbers are important in securing a loan from a major bank, as well as clear justifications for what the money would be spent on.

Smith says he has seen many small business owners who want capital without knowing exactly where it will be used. “A lot of them fly by the seat of their pants—that doesn’t mean some of them are not going to be successful, but the banks need to know what it is you want to use that money for, and will want financial justification.”

He suggests that owners take the time now to create a clear business plan, including a breakdown of where the loan will be applied (whether to hire a new employee or buy new equipment or software) and some clear calculations of how these investments will positively affect revenue. “You’re not just going to use this stuff to buy inventory—who are your target customers, how will this capital help?”

Business owners should also be able to show their sales and credit history over the past two to three years, demonstrating who their target market is and why it’s likely to continue to grow. But Smith emphasizes that even when the financials look good, it’s key to “sell the numbers,” coming across as confident and positive to the person making decisions on the loan. “I still turn around and look at you and wonder if you, the individual, are capable of making that happen,” he says “At the end of the day, you have to run the business. You have to be constantly selling your business and selling yourself.”

Smith points out, though, that even well-positioned companies are having trouble getting loans, and he is skeptical of the efforts by major banks that promise more loans for small businesses. “I don’t think frankly that the Wells Fargos or the Bank of Americas are really going to care about these small businesses,” says Smith. Instead, he suggests that distributors looking for loans focus their attention on smaller, local banks. He believes the more local focus of community banks and credit unions as better options for capital, but that even these sources require a clear and compelling presentation if the money is to be secured.

A growing area for distributors to acquire capital is through microfinance. Michelle Matta, president of A Turtle Loves Me (asi/466235) reached out to small business lender ACCION Texas when she started her business in 2007. Wells Fargo had rejected her loan application, saying she had not been in business long enough, but ACCION provided her with the $25,000 she needed to buy her first embroidery machine.    “When they see that you’re the sole proprietor, the big banks don’t even want to look at you if you’ve been in business less than five years,” she says. Matta has since returned to ACCION for an additional $25,000 and $50,000 loan, which allowed her to buy an additional machine and hire a new employee in March of this year. “I never really stressed out about [the recession]. I’d come home at the end of the day and tell my husband, ‘I feel like I’m out there planting seeds and I just need to wait for it to grow.’ And sure enough, the phone has been ringing 24-7 these days.”

ACCION Texas is one of hundreds of microlending organizations available to small businesses. To find a lender in your area, visit the Association for Enterprise Opportunity at www.aeoworks.org.