Since he started his company, five years ago, Tim Chen, the president and owner of Keys Fitness Products in Dallas, has successfully raised his lending line from an initial limit of $50,000 to its current level of $4 million. Thanks to a working-capital supply that kept up with the exercise-equipment wholesaler's expansion needs, annual sales grew from $1.2 million in 1989 to $15 million in 1993.

What's Chen's secret? He's constantly finding ways to show the bank that he has good internal financial controls in place. Other companies might simply give their bankers a tour of production or warehouse facilities, but Chen tells them about the intricacies of his company's financial-reporting system. "Before I started my business, I worked as a financial analyst, and that means I can understand a banker's business perspective," he explains.

During twice-monthly telephone calls to his bankers, Chen also discusses "our supply sources, our pricing strategy, our marketing channels. We want them to be confident about our long-term growth prospects as well as our short-term results." Confident bankers, he says, have raised his credit line once or twice each year without even being asked.

When problems arise, he notifies his lender promptly. "Our second-largest account experienced a cash-flow problem that required us to set up a reserve against a possible $120,000 bad debt. I called immediately, and I put it in the context of our historical bad-debt ratio of only .6% of sales."

Chen's final advice: "Don't keep chasing after bankers. If your company is growing, and you know how to present your financial strengths, they will come to you." Case in point: last year Keys was wooed by three banks, including BankAmerica, which raised the company's credit limit from $3 million to $4 million with no fees attached.

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