If you don’t have collateral to pledge to obtain working capital for your small business startup, don’t worry. There is still a way to finance your business. Unsecured business lines of credit can be obtained without collateral for your small business startup. However, there are a few things you need to know before you apply for an unsecured business line of credit. Lenders that offer unsecured business lines of credit typically have stringent credit criteria you’ll need to meet before they issue the credit lines. Since there is no collateral being pledged, obtaining an unsecured business line of credit requires that you have a good personal credit history.
Good Personal Credit Will Help You Get Working Capital for Your Small Business Startup
Good personal credit will enable you to get working capital for your small business startup without collateral. All you need to obtain an unsecured business line of credit is a personal credit history that is at least five years old with no derogatory or delinquent accounts reporting. This includes accounts with late payments in the last two years, collections, unpaid tax liens, charge-offs, and bankruptcies, etc. You should also have at least two personal credit cards in your name that have been open, preferably, for at least one year with a total combined limit of $5k and under 30% of that limit utilized. If you can meet those minimum personal credit requirements, I can almost guarantee that you will get approved for unsecured business lines of credit.
LenCred Can Help You Get Working Capital for Your Small Business Startup
The LenCred team specializes in helping small business startups obtain unsecured business lines of credit that can be used as working capital. If you (or someone you know — i.e. a business partner, friend, or family member), has a good personal credit history, your small business startup may be able to qualify for unsecured business lines of credit. Contact us today to learn more.