Business lines of credit can be an invaluable resource for virtually any company. To improve your chances of securing one, follow the tips in this article.
Research Different Lenders
There are more options than ever before when it comes to providers of business lines of credit. That means research is extremely important. To decide which lender is right for you, try reaching out to other small businesses for recommendations. Before proceeding with a specific lender, look into their eligibility and paperwork requirements.
Take Care of Your Credit Report
Your business’s credit history will play a role in securing virtually any type of financing, including business lines of credit. Some basic tips for maintaining a good business credit score are to stay on top of payments, don’t use too much of your available credit, and be judicious when applying for additional credit. Additionally, you might want to order a copy of your business credit report so that you can identify and fix any errors. The three main agencies that provide business credit reports are Dun & Bradstreet, Equifax, and Experian.
Prepare Your Paperwork
Paperwork is an unavoidable part of applying for a business line of credit. To make the process easier, gather your business and personal income tax returns, bank statements, and financial statements. In some cases, you will also need to present your business license.
When it comes to the amount of credit you apply for, it is advisable to start small. In fact, you may have to, especially if your business is new or has a shaky credit history. Applying for or accepting a smaller line of credit will likely make lenders more comfortable extending the credit in the first place. Additionally, smaller lines of credit place a de facto cap on how much you can borrow, which in turn makes it easier for you to make the required monthly payments. As you build up a history of on-time payments and responsible credit usage, you can apply for more.
For more tips on business success, check out Nation Capital Financings’ other blog content.