Select Page

For new business owners, having access to unsecured business lines of credit can open opportunities and reduce the need to take on debt though traditional bank loans. Unfortunately, most banks will not offer unsecured credit to new businesses, because they do not have the established financial history or credit ratings required to get an approval. This leaves many entrepreneurs seeking assistance through different channels or racking up large amounts of debt by using personal credit cards to fund their operations. Fortunately, there are options available for new business owners to get access to unsecured business lines of credit without having to deal with the red tape of banks.

The conventional method of getting unsecured business lines of credit

Most business owners have traveled down the long road to unsecured lines of credit. The first step of this method is to acquire a secured business credit card. By using this secured line of credit – directly tied to funds available in the business bank account – and paying down bills in a responsible manner, then (after many months) a bank may offer an unsecured line of credit. This method has worked reliably for many years, but the time involved to get access to a basic unsecured business line of credit is often too long, especially for the minimal spending limit.

Talking with vendors and suppliers

Banks and credit card companies are not the only sources for lines of credit. Many vendors and suppliers will also extend lines of credit to new business owners as a means to broaden their customer base. This gives business owners more spending power with those specific vendors, while keeping purchasing costs spread out over monthly installments. Additionally, using these lines of credit from vendors and suppliers can go a long way to improving your company’s credit rating, if they report their information to large credit agencies. It is always worth your time to talk with vendors about possible lines of credit and if they report information, before settling on using them as a main source of supplies and inventory.

Commercial Financing

One frequently overlooked method of sidestepping the restrictive requirements of banks and getting direct unsecured business lines of credit is the world of commercial finance. For new business owners, unsecured lines of credit can be arranged with limits ranging from $25,00 to $100,000 and beyond – even if the business has yet to establish a full year’s worth of revenue. Contrast this with traditional credit sources and banks, who are only interested in bottom line numbers and earnings. Commercial finance professionals work with business owners and take into account the size of the business, how profitable it is, and other contextual factors to arrange an unsecured business lines of credit to give entrepreneurs an edge in a very competitive business climate.

Having access to unsecured lines of credit is something no business can afford to be without, and going through conventional channels is not always an option. By using the guidelines listed above, your business will be able to use lines of credit and grow successfully.