How Small Business Owners Land Unsecured Business Lines of Credit
Your business may not need credit now, but you might in future. In fact, it’s very likely that having a ready business lines of credit will benefit you. Credit allows you to act immediately when business opportunities come up or to expand your business at will. Creating a stellar credit profile means starting now (well before you’re really “in need” of credit) to build up your company credit-worthiness. Here’s how:
• Prove you exist: Register for free with Dun & Bradstreet, Experian and Equifax.
• Build banking relationships: Become known at your branch and key personnel—but not for being overdrawn. Use your personal bank if you have a good history with them. Keep attractive minimum balances and make frequent, reliable deposits to your business account.
• Show you’re serious: Get a tax ID number if you’re a consultant or one-person business, so you can build a business credit history separate from your personal finances.
• Establish credit history: Obtain (and pay on time) business credit cards, phone lines and arrange for vendor billing or PO purchases where possible (which constitute short-term business lines of credit) and help show your viability. Do this early on, because length of business credit history matters.
• Lease to help your profile: Leases may be easier to qualify for in the early stages of your business. Lease payments made on time for business equipment, cars, etc. show your responsible attitude, and are reported to the credit bureaus. Leases may have tax or cash flow advantages too.
• Create a business plan: Show professionalism by submitting an outline of your business and your plans for the credit line.
• Apply in person: Be prepared with your business plan, billing history, etc.
• Tout your individual credit: If you (or other company principals) have a high personal credit score, it says a lot about your small business.
• Apply for more credit: As your business grows, and your good credit history along with it, seek a credit increase—so you’ll have credit available instantly, when you need it in future.
When you need business lines of credit or other financial products, talk to Trihawk Capital. Contact us today.
