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Tips to Getting an Unsecured Line of Credit For Your Business

Guest post by: Matt Winter

Article Overview: Every business would love to have access to an unsecured line of credit. Most will never be able to get one. These tips will help make it easier for your business to get that unsecured loc when the time comes.

Tips to Getting an Unsecured Line of Credit For Your Business

You may have heard about an unsecured business line of credit, but you may not know what it is or how it may apply to you.

An unsecured business line of credit is a loan offered by some banks that does not require any collateral. This type of loan is great for the recipient because it does not put any assets at risk

Because there is no collateral involved, this type of loan is very risky for lenders so there are much stricter application requirements and this means that it is very difficult to obtain one.

If you are interested in applying for an unsecured business line of credit (loc), here are some tips to make your application a success.

Have the Right Type of Business Setup

1. Not every business is a candidate for a unsecured line of credit. Your business should be registered as a corporation or an LLC that has been operational for a minimum of 2 years.

2. Be sure and have a proper street address for your business, not a P.O. box and not your home address.

3. Have the right lines of communication. This means having a legitimate business phone line registered in the name of your company. Having a fax line and independent company email addresses will also be beneficial to your business profile.

4. You should have close at hand all of the legal documents associated with the setup of your company. These documents will include personal and business financial statements, tax documents, LLC or incorporation documents among others. It is vital to have all of these documents ready when they are requested by a lender.

Register Your Business Properly

5. Get your credit profile in shape. Such a profile is vital for an unsecured business line of credit. Dun and Bradstreet or similar agencies can help you get your credit profile established.

6. Have a Paydex registered in your business name. A Paydex reports to all necessary financial institutions, credit agencies, and other lenders about payments. Paydex scores range from 0-100 and the higher your score, the easier it will be for you to get your loan.

Pitch Your Proposal

7. Along with all of the documents listed above, you will also need to present a proposal with your application for an unsecured business line of credit. Be very detailed about why you need the requested amount and about how the funds will be used. Try to anticipate any potential questions that could arise and address them in your proposal.

By presenting all of the necessary documents and having a nicely detailed proposal, you will make the lender's job easier and your application should proceed more quickly.

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Article Tags: small business, small business line of credit, unsecured line of credit



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