How To Obtain Unsecured Business Lines of Credit To Fund Your Small Business
A common mistake many companies make is not securing a line of credit until they actually need one. Companies need to remain proactive, and that means obtaining an unsecured business line of credit when the business is still doing well. Before your business even opens its doors to the public, you should look for ways to build a good credit history, so your chances of obtaining a credit line increase substantially.
As you develop the initial idea for your business, you should write what your company does in the business plan. You also want to outline the primary reason why you would need a line of credit. The bank may not ask for a plan, but providing one anyway shows your professionalism.
The first thing you need to do is register with the business credit bureaus. Experian, Equifax and Dun & Bradstreet are the main three you need to work with. It is completely free to register.
Once you do that, you want to make sure you maintain a positive relationship with your bank. Make sure you always have the minimum requirements in your checking and saving accounts. You should also begin forming a relationship with the bank manager or even just a business banker. Developing a one-on-one relationship can help a lot if you need to get a loan but do not have much in the way of a credit history.
You want to acquire a business credit card from your bank. Pay off your credit card bills on time each month. This is an excellent way to build up your score.
When the time comes to meet with a banker to get an unsecured business line of credit, you want to be as professional as possible. Bring all essential documentation. This includes your business plan and bills. Although the banker can probably access your bank history independently, you should still bring a copy just in case.
Part of the documentation you bring should be related to your business and personal credit scores. You want to highlight to the banker that you have a great history of paying your bills and staying within a budget. In the event your credit score is less than desirable, then focus on other positive attributes your company brings to the table.
You need to really work to acquire an unsecured business line of credit. As long as you remain proactive about having a good credit history for your business, you will be on much better footing when you go to apply.
