How Small Businesses Land Unsecured Business Lines of Credit
As a small business owner, there may be times when you need a little extra each month. Usually, you have the money coming in from customer payments, but bills may be due before the payments make it to you. Unsecured business lines of credit typically do not require any type of collateral. This short-term loan can provide the cash flow you need to make ends meet, but how can you get one?
In order to qualify for this type of loan, your business is going to need some type of positive credit history. You can maintain good credit for your company by keeping a positive bank balance, paying bills on time and using business credit cards. You can review your current score by registering with the business credit agencies. This gives you chance to know whether your credit is looking good or needs some work.
You may also have to think about your personal credit history. Even though this loan is going to go toward your business, lenders may not want to give money to someone who cannot manage their personal finances. You can also review your credit score by requesting it from the three big bureaus.
Creating a relationship with a business lender may help you get your foot in the door at certain establishments. Of course, a friendly relationship may not be enough to actually get you qualified for the unsecured business lines of credit, but it can help you make a good first impression.
Show how business savvy you are by writing and reviewing a business plan. This type of document can go over what your business does and how you plan to improve the company in the near future. You can explain exactly why you need a line of credit right in this short report. Having a written statement shows how professional you are and how serious you are about wanting the loan.
Gather up important documents. Your lender is going to want to see a lot of proof of your spending and earning habits. You may need to bring billings, business plans and bank statements to ensure everyone is on the same page.
With the proper planning, you can easily qualify for unsecured business lines of credit. Remember to go into the lender meeting with confidence. Be ready to explain any potential negatives, such as a lower credit score, and why the officer should not let this negative stand in your way. Being prepared could be the difference between getting approved and getting turned down.