How to Get Started in Obtaining an Unsecured Business Line of Credit

If you're a small business owner, you most likely have concerns on getting funds to expand your business. Your not alone, most business owners have the same concerns as you. Even if you're not thinking about it now, it's imperative to start building your business credit right away while conducting your day to day business. It can only help when you are ready to expand your business and start talking to lenders

 

In most cases, lenders would prefer to offer secured line of credit in which collateral is put up for guarantee. But if the business owner does not wish to put personal assets into a business venture, applying for unsecured line of credit should be considered as an option. However, you as a business owner muct keep in mind that unsecured business lines of credit do not get approved very easily, if at all. In order to improve your chances of getting a line of credit for your business, you need to put some procedures into place.

 

First step would be to have your business properly established as a separate entity from your personal life. It would be in your best interests to file the business as a corporation or an LLC. Whatever you do make sure you list your business as a corporation or an LLC and don't file a business alias because you'll have much less of a chance of getting any type of loan (much less an unsecured line of credit) for your business only. That's because a sole proprietorship is really not a business entity and your personal assets are still at risk.

 

Once the business is filed, then start establishing good habits to build your business credit rating. Allow for a period of time for your business to accumulate a decent business credit score history. Most lenders would require at least two years of operations, preferably devoid of any unfavorable financial practices such as late payments or near bankruptcies. As you keep a clean business credit rating, you'll be considered less of a risk when it comes time to apply for these loans.

 

For more information on unsecured business lines of credit, visit http://www.buildingmybusinesscredit.com.