Successfully obtaining a business line of credit from a bank can be a difficult task, but not an impossible one.
Most banks that will consider extending a business line of credit after your business has developed strong business credit profiles and scores. That normally consists of developing at least 10 reporting trade lines, having one of those be in excess of ten thousand dollars, and having business credit scores in the 70 or above range.
Many business line of credit providers also will want to see that your business has filed two years worth of tax returns which indicate gross annual revenues of at least $500,000. This may seem like a large task to many new or small business owners.
But there is an excellent alternative for the new and small business owner. If as a small business owner you have good personal credit scores (in the 700 or over range) there are business credit cards which can act like a business line of credit. These business credit cards can be obtained in the fifty thousand dollar range if your other personal debts are not too high.
The draw back to using business credit cards is that they normally require you to sign a personal guarantee and will sometimes show up on your personal credit reports.
One big advantage of using our Business Finance Coaching system is that it provides you with a complete list of business credit cards, what they require for approval, if they require a personal guarantee or not, if they report on your personal credit or not, and which ones report to the business credit agencies.
There are other alternatives to traditional a bank business line of credit and those are vendor lines of credit. In the United States there are over 6,000 vendors that are extending trade credit and reporting to the business credit agencies. Many of these vendors will extend a line of credit to your new business just as soon as your Federal EIN is filed and your business bank account is open. These are an excellent way to develop the reporting lines of credit your business needs to build strong business credit scores you must have if your goal is to also obtain a bank line of credit.
The bottom line is that if you never take the time to build strong business credit scores, that are separate from your personal credit scores, then you will never be able to secure a bank business line of credit that is not somehow tied directly to you personally.
Here are a few more articles you might be interested in:
Bank Business Line of Credit
Banks Offering Business Lines of Credit
Get Business Line of Credit
New Business Line of Credit
Secured Business Line of Credit
Corporate Lines of Credit