In my experience as a small business consultant over the last decade, I have come to realize that unsecured business lines of credit are by far one of the simplest ways to fund a business. This is good news for business owners, especially startup business owners who may find it quite difficult to acquire capital for a new business. In fact, for some startups, unsecured business lines of credit may be the only way to fund the new venture. If you’ve been searching for ways to fund your business, you may want to learn more about unsecured business lines of credit.
What are Unsecured Business Lines of Credit?
Unsecured business lines of credit are revolving credit lines that can be used to pay for any business expense. They are similar to personal lines of credit, however, they are to be used strictly for business expenses. The great thing about unsecured business lines of credit is that both startups and existing businesses can qualify for them. Furthermore, business owners are not required to pledge collateral to be considered for approval. In most cases, lenders also do not request the submission of financial documentation such as w-2’s, bank statements, check stubs, tax returns, etc.
How to Get Approved for Unsecured Business Lines of Credit
For the most part, all you need to get approved for an unsecured business line of credit is a good personal credit history that is at least five years old. If you have a history of making timely payments on a variety of different accounts (I.e. installments loans and personal credit cards), you have a good chance of getting approved for unsecured business lines of credit. Lenders will especially pay close attention to any personal credit cards you may have. They will make sure you’ve always paid your personal credit card balances on time and that those balances are under 30% utilized.
In other words, they want your personal credit cards to have low balances in comparison to their limits with no late payments. If your personal credit history shows this and you don’t have any negative or delinquent accounts reporting, I can almost guarantee that you will get approved for unsecured business lines of credit. (Even if you have a few negative or delinquent accounts, you still might qualify).
Find Out if You Qualify for an Unsecured Business Line of Credit
If you think you might qualify for an unsecured business line of credit, LenCred can help. We will analyze your situation and educate you on what you need to do to get approved. Contact us today to learn more about how you can get up to $250,000 in unsecured business lines of credit to fund your business.