Tips to Getting an Unsecured Line of Credit For Your Business

Guest post by: Matt Winter
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Tips on How to Build Business Credit - By Matt Winter

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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Tips on How to Build Business Credit - By Matt Winter

About the Author: Matt Winter

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Matt Winter discovered the excitement of entrepreneurship during his college years and has continued to be a small business owner for almost 20 years now. After learning first-hand the types of challenges that face small business owners, especially with cash flow, he joined together with a group of like-minded associates to help other small businesses overcome these challenges and to find success in their respective markets. In his role as a consultant for both Accu-Pro P&R Specialists and Accu-Pro Financial, Matt brings a unique outlook to the conversation. Always a dreamer and a believer in the â€œlittle guyâ€, he genuinely respects his clients and shares both their enthusiasm and their frustration. It is this attitude that makes Matt a true friend to his clients and a real champion for their ongoing success. You can visit Matt and learn more about the Accu-Pro consulting services at www.accuprofinancial.com and at www.bettercashflownow.com
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