Are you a small business in need of capital for business finances, growth investments, inventory purchases, payroll or related expenses? Have you been denied because of bad credit?

The application requirements for obtaining an unsecured business line of credit can be strict. This is mainly because the lenders are more at risk than the borrowers. How is that possible? It’s simple. Lenders don’t ask for any collateral or personal guarantee, thus being the reason why obtaining a line of credit becomes a great benefit for the borrower. Now even though the risk is lower for the borrower, it makes it an even higher risk for the lender. Alternative funding providers such as Advance Funds Network do help to make the process much easier for small businesses, even if they have no credit or bad credit. There are always options. But a great credit rating is an important asset to your company, and these tips will help you get there.

Credit is an important factor when it comes to the success of your business. If you’re having a hard time getting funding through traditional methods or because of credit issues…there is a formula that can help you when applying for an unsecured line of credit:

  • Establish your business to be as professional as possible
  • You must be registered as an corporation or LLC
  • You must have been an operating business for at least 2 years

Borrowers will also look for a physical address for your business (outside of just using a P.O. BOX or home address). Getting an unsecured line of credit can be a beneficial factor to your financial success, but if you don’t have your business in order (or seem profitable) lenders will not loan it to you. Consult your accountant or lawyer for additional steps on maximizing your professional potential.

Besides being a business professional, chances of getting an unsecured line of credit are more in your favor if you have a good credit rating. When should you start establishing a credit rating? It should begin as early as the day you start your business. To help build up credit, follow these steps:

  • Obtain a company credit card or small loan
  • Make sure your payments are on time as well as steady each month
  • Report your payments to a credit bureau

Another important rule to remember is if you can’t make your payments on time, make them early! Having a strong credit rating will help increase your chances of securing credit. If you have bad credit, don’t be discouraged because there are still other options.

Apply to multiple lenders

Research the lenders first before you apply. Look for lenders who can meet your business needs and/or have competitive interest rates. Also apply to multiple lenders at the same time so it won’t affect your credit rating. Credit companies give you a 1 day grace period before it affects your rating so use your time wisely and move rapidly. It can take up to 48 hours for an approval or not (depending on the company).

To conclude:  With an orderly business, good credit rating and proper preparations, your chances to secure an unsecured business line of credit will increase.  Remember, just because you have a business doesn’t mean you will automatically qualify for an unsecured line of credit.  Strive to always be excellent!