   
Unsecured
Business Line Of Credit
Unsecured business lines of credit are hard
to come by these days. The credit market is tight, banks and
lenders are not real interested in carrying any unsecured
loans, for anyone.
That said, there are some options for small business
owners.
If you own your own small business, you are probably very
aware that cash is critical … especially in these times. Cash
helps you have “staying power” through the downturns and tough
times. Unfortunately, borrowing cash today is a challenge.
If your business is successful, you know how hard it was to
make it so. Hard work, business acumen, sometimes sheer guts.
But if you want to take your business further, or if you’re not
doing as well as you’d like, you probably realize how important
a business line is. Whether you need to increase your
inventory, hire new people, move to larger space, or increase
your advertising and marketing investment, an ongoing access to
cash is vitally important.
(I remember taking receiving my first line of credit of
$50,000 … it allowed me to purchase cutting edge computer
graphics equipment that none of my competitors had. My business
went on to dominate the business graphic production market,
and, ultimately, helping to grow my company into one of the
largest in the nation. Could I have done this without the
credit line? Maybe. But it would have taken a lot longer. It
would have been a lot harder. And the chances of growing as
large as we did without the equipment I purchased with my
credit would have been slight. So, did it pay off? It certainly
did when I sold the business for a serious amount of money. Is
it the best option for every small business owner? Obviously,
every situation is different and an owner should take great
care in deciding whether or not a credit line is
advisable.)
Quite simply, the fact is that most small business need an
ongoing source of working capital.
There are lenders still offering unsecured lines. They are
usually looking for small businesses seeking $10,000 in
unsecured financing, with an owner with a minimum credit score
of 640.
These lenders focus on your credit history and business
financials. The stronger these are, the less documentation you
need to provide. For instance, if your credit score is above
700 FICO you will most likely not even have to provide income
or asset documentation.
Some programs require:
- NO Business Plans
- NO Tax Returns
- NO Collateral
- NO UCC Filings
- NO DOC to $400,000 (Start-Ups OK)
- PARTIAL DOC to $10 Million
Offers may come in the form of several types of credit … a
loan, a line of credit, or a credit card. Unfortunately, you
won’t always have a choice.
When applying for your line of credit, it is very important
to be honest with the lender or broker. It’s almost impossible
to hide any negatives in your history, better to be upfront
than to get caught somewhere in the process.
Finally, it’s important that you understand that the credit
market is tight right now. You’re not always going to get
everything you want, or think you should get. If you understand
this upfront, you are less likely to be disappointed when you
do receive letters of intent or offers.
The good news is that there is still even a market for a
small business line of credit.
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