Obtaining funding can be a challenge for any business, and especially difficult for smaller and less established organizations. An unsecured line of credit is considered one of the most flexible and sought-after form of financing. This is because it doesn’t require collateral, has lower interest rates than other loans, and can be used and repaid as needed. When seeking an unsecured line of credit, these three tips can increase your chances of approval:
Understand What You’re Looking for
Compare local and online lenders and check their rates and repayment terms. If your business already has an established relationship with a local bank, they may be more open to approving your credit line. There are different types of unsecured lines of credit as well. Some may only be good under certain financial or productive circumstances, while others are considered for seasonal use. Talk to lenders and consult with a financial advisor to learn more about the type of credit line that you need.
Don’t Wait Until You’re Struggling
Your ability to get approved for an unsecured line of credit directly correlates with the company’s financial health. Waiting until your business is struggling and losing money can make your loan too much of a liability for lenders. Look at future financial trends and decide early whether or not you’ll need additional funding. Being smart about your resources can help you stay ahead of your debt and promote business growth.
Prepare to Qualify
Unsecured lines of credit can be difficult to obtain if the business isn’t doing well. It’s important to do everything you can to bolster the company’s credit score and to keep meticulous financial records. Sometimes a lower credit score can be overlooked for years of well-recorded profitable cash flow. Look into the qualifications ahead of time and try to give yourself at least a year before applying.
The professionals at Steadfast Funding Partners have extensive experience with small business financing and are here to help. Contact us today to learn more about growing and sustaining your business.