6 Steps to Getting Unsecured Business Lines of Credit
Most businesses don’t realize how important a business line of credit is until they need to get one. This is something many businesses run into a problem with when their business needs a line of credit but the business is new and has not yet established a credit history that is long enough to receive the credit they need to get a loan.
This is where unsecured lines of credit come into play. These can help businesses get the financing they may not otherwise be able to get through a line of credit.
The following are 6 steps that a company can take to help establish a credit score for their business so they can get the lines of credit they need to grow their business:
• Begin by registering with various business credit agencies including Dun & Bradstreet, Equifax, & Experian. This helps you build a credit history and allows you to establish credit so you can get a line of credit in the future when you need it.
• Be sure you are constantly paying your cards off and that you are keeping up with payments on minimal balances on the cards your business owns. Also, avoid negative issues such as overdrafts and insufficient fund notices which proves your business is reliable and can be counted on not to spend more money than they have in the bank.
• Apply for various business tools that require payments to help establish a credit history. Some examples of things to consider include credit cards, cell phones, or to be billed for supplies so you have bills to pay “on time” to help build a credit history (as opposed to paying up front for everything).
• Write up an outline that starts a business plan that will help your company grow. Also, specifically state the reason you are seeking this loan and what the loan will offset the cost of. Being able to provide this concrete idea of what you will use the loan for helps the lender see it in a more reasonable way to make them more likely to give you the loan if you indeed do qualify.
• Meet with your company’s business banker to help when you are ready to apply for a line of credit for your business. Provide them with documentation that is required including business plans and financial information so they know how much you qualify for.
• Note that exemplary personal credit scores on the parts of the business owners can help their business get off to a great start. It proves that these owners are responsible and are going to pay their debt on time, which leaves credit bureaus more likely to loan you money than someone who is not so responsible.
For more information on a way to get an unsecured line of credit when your business needs it the most please feel free to contact us at Royalty Business Lending for more information.