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by Scott Beale

Looking For a Start Up Business Line of Credit

Article by Williams Acosta

The key to any successful startup is maintaining cash flow. Of course, if you are new, getting startup funding for your company can be difficult because….. you and/or your new business and have no track record. Bit of a catch 22 situation there.

However, something you may want to think about is unsecured loans are loans that do not require any cash down, home equity, personal assets, or business assets of any kind. Obviously, unsecured lending is a valuable option for startups which have property or assets they want to protect. Should you default on the loan and unsecured versus secured, your property and/or assets will be protected from any liens…. now while these are attractive, can you really find such an animal?

Without a doubt, an unsecured business line of credit is probably the most valuable financial tool that a small business owner can possess. Essentially, the credit line works like a huge credit card but at times can have added benefits like check writing and lower interest rates as compared to most business credit cards.

An unsecured line of credit loan is extended by banks or other types of lenders. The amount of the credit line offered is based solely on the credit worthiness of the company and does not require a personal guarantee. Even though unsecured business lines of credit have been in existence for many years, it still comes as a surprise to many small business owners that the program exists or that their company can even qualify.

One typical and smart question that you should ask yourself is why would banks make unsecured line of credit loans? The answer is simple. Banks and other lenders are already making unsecured lines of credit to you as an individual. Why shouldn’t they offer a commercial program? So in reality, it is not nearly as big a stretch as most people think.

If you think about it, almost every American carries at least one Visa, MasterCard or American Express credit card in their wallet or purse. I know in my wallet, with multiple businesses + personal, I carry 8 credit cards at a time. In this case, then one way to think is that the total of all the credit limits on all the cards is your total line of credit. Now, we don’t advocate going out and rapidly blowing that but change a way to change your perspective on things.

The credit cards and the limits on each are issued to you based on your credit worthiness as an individual and are totally unsecured. Therefore, it makes good business sense to offer an unsecured credit line program to corporations. In fact, corporations could be viewed as more stable than an individual and are more likely to use the lines more frequently.

When you are a startup, of course this gets a little tricky and requires some unique techniques above and beyond the scope of this article. But, if you have a startup and are looking for capital credit lines, you should really look down this path. Fortunately, just like your personal credit cards, you only pay on what you use and for new business, we suggest you play it very conservative. However, when you get your credit line, it gives your business access to capital when you need it.

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Question by Nick D: what are the differences between a line of credit and a personal loan?
I would need 10 000$ to buy a used car. I have only 455$ credit card debt, my credit score is excellent. Can you tell me the advantages/disadvantages of a line of credit and a personal loan. I asked my bank adviser and he told me to take a personal loan, but why? I was a little bit skeptic.

Best answer:

Answer by Ryan D
a line of credit can only be taken if you own a home (or perhaps a 200k car), you can not take a line of credit without a house as collateral. You can take a personal loan using just your credit history, and job status.

Add your own answer in the comments!

by Ron Sombilon Gallery

Additional Business Funding Through A Business Line Of Credit Online

Compared to working for an employer, you have better command of your time if you are your own boss. However, there are also several challenges and responsibilities that come with owning a business. And one the most challenging is ensuring that your business has good cash flow to finance your daily operations, as well as your plans for expansions. If you have poor credit, the challenge becomes doubled. Acquiring business funding is no easy task, especially if you do not have an impressive credit profile to back you up. So does this mean you need to give up on your dreams of having your own business enterprise? Certainly not.

There are several ways for you to get the business funding you need. One of the most common ways to do so is through applying for a small business loan, given that you have good business credit ratings. There are lots of banks and financial institutions that can help you with small business loans, and the Small Business Administration is another organization that can help. However, they often require collateral and you must be able to meet their loan requirements so your request for funding can be approved.

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A good alternative is to get additional funding through a business cash advance. This works like a business loan but it does not require you to have commendable business credit ratings. The repayment schedules are also not as harsh. There are several financing institutions that offer this kind of option and you might start considering getting business funding through this option once you know that it does not require collateral.

Another option you might want to consider is a business line of credit online. It works more like a revolving fund offered by most banks. It allows you to have a certain amount of cash in your credit line that can be used to make purchases. The cost of the purchases you make is deducted from your business line of credit and as you make payments for them, the corresponding amount is added back to your business line of credit online. And very much like a cash advance, no collateral is required. Most funding firms can grant you this option even if you have poor credit scores.

The next time your business funding application gets declined, do not give up on your business just yet. There are still other options for you to acquire additional funding for your business. All it takes is for you to get to know more about some of them.

If you need help with a business line of credit online or if you want to find alternatives to business funding, visit our site today.

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