Who wants to be a millionaire? Learn about how to get a bank loan for your business without burning your "lifelines."

Securing financing is often one of the first steps to successfully owning and running a business. But even savvy borrowers can get trapped in a bad loan situation. A few precautions can help prevent common mistakes.

Get Everything in Writing

All the terms and details of the loan need to be specified in writing. A lender may make oral promises and agreements, however borrowers should rely only upon written documentation. A legal doctrine called "parol evidence rule" disallows any evidence of oral agreements in court if they conflict with the written loan documents.

Be Careful What You Offer as Security

Although there are few specific rules that can be applied universally to actual terms of a loan, one general guideline is: never offer something as security that you cannot live without. Cautious lenders may ask for more security than necessary. All assets pledged as security are at risk of loss should the loan default. Oftentimes lenders ask not only for security from the borrower, but also a guarantee from a corporate officer of the business, perhaps a deed of trust on their property. In such a case, if the loan should default, both the borrower and the guarantor are at risk of losing their collateral because the terms of the loan legally allow foreclosure.

Understand the Loan Agreement Before Signing

Legal doctrines intended to prevent fraudulent lending can sometimes inhibit the borrower's legal remedies should something go wrong. Therefore it is imperative to fully understand the agreement before signing it. Lawyers are among the few people besides bankers who can readily sort through and understand the details of a loan. If you have questions about the loan or your rights, find legal counsel. Lawyers can be expensive, but you are hiring an expert who will protect your best interests. The downside of hiring a lawyer is, should there be litigation, the bank may say that because a lawyer examined the documents, they could not have taken advantage of you.