How To Get Unsecured Business Lines of Credit
Small businesses may often overlook applying for a business line of credit until it’s too late. It can take some time to accrue enough good credit to apply, so it can be very important for any small business to start early. The timeline for application can be fairly straightforward and the only real investments a business has to make is putting in the time and effort necessary to establishing quality credit reports. Here are four easy steps to help your company acquire unsecured business lines of credit.
Register Your Business
The first step may be the easiest in the entire process. All you need to do is register your business with the proper business credit agencies. There are a few different types and it won’t cost you a thing to register. Again, however, make sure you perform this step as soon as possible. Time can be of the essence when it comes to establishing good banking history, and the sooner you start, the sooner you can get your line of credit.
Keep a Positive Bank Record
Make sure you’re keeping your bank account in the black by paying your minimum balances back on time. Try not to accrue any negative balances like insufficient funds or late payments, as these can hurt your potential ability to get credit. Ensure you also keep minimum deposits in your accounts at all times so the bank can’t add extra charges to your bills. Becoming a physical presence in your bank can help as well, giving you opportunities to build relationships with bank managers or business bankers. These contacts can come in handy later on down the road when trying to apply for unsecured business lines of credit.
Write a Business Plan
Eventually, after you’ve established your ability to pay the bank on time and your other credit bills, you may need to write down a business plan. This plan entails what functions your business performs and the reasons why you’re applying for a line of credit. Banks may not require a business plan to get the credit, but having one can make you look all the more professional. The plan may also give you opportunities to demonstrate your abilities to pay bills on time and operate in a budget.
Apply With a Banker
Once you’ve completed the three previous steps, you can arrange a meeting with your business banker. At this point, the two of you can apply for the actual line of business credit. The process may require all the documentation of your steadily-made payments, your business plans, and billings you’ve made with vendors in your own business.
Once your business is approved for unsecured business lines of credit, you can begin expanding, refurbishing, or just enjoying your business for the success that it is.