Where Can My Company Find an Unsecured Business Line of Credit?
Unsecured lines of credit can be tough to come by if you haven’t spent the proper amount of time building corporate credit. The whole idea behind an unsecured loan of any kind is that you have shown yourself to be reliable and able to pay your bills on time.
Once you have created a strong business credit history, getting an unsecured business line of credit is possible from any of a number of resources. Why Get a Line of Credit? A line of credit is an excellent form of long term loan when you know the possibilities of large expenses exist, but don’t want to pay for them before they occur.
A business line of credit gives you a cushion for seasonal fluctuations or the ability to increase your inventory for an unexpected order and still keep your cash flow moving. Small Business Association Help in Obtaining Unsecured Business Lines of Credit Since you make no payments and have no interest added to the loan on money you don’t use, you can have the line of credit and make no payments for as long as you can delay spending the money, but it will be there when you have to have it for major purchases or to tide you over during a tough spell.
The Small Business Association provides many resources to help you get started in obtaining a line of credit for your business. They do not give out loans themselves, but their service vets your company so that when you go to a bank to apply your acceptance is guaranteed.
An even bigger benefit of the SBA is that they will tell you if you are ready to apply, help you with the tools you need in building corporate credit if yours is weak, and provide insights to other loan options if necessary.
Unsecured vs. Secured Even a brand new business owner can get a line of credit for a start up when capital is most needed if they have good personal credit and want to use it to back a loan. This isn’t always the best option, however, and puts even good personal credit at risk.
A better option is to use vendor accounts and corporate credit cards while building corporate credit so that you can prove your stability and ability to pay. When your business credit rating is reliable you can get an unsecured line of credit much easier without risking your personal financial background.