Having business lines of credit can be crucial to keeping your business running smoothly day-to-day. It can help keep cash flowing, pay the bills when receivables are a little slow, and it can be used to manage daily operations as a reliable source, rather than counting on the sporadic nature of business income.
When you apply with a lending institution for a business line of credit, there are some things you can do to make your business more appealing, and much more likely to be approved. If you can follow these guidelines below, your chances for approval are vastly improved.
Start Building Strong Lines Of Credit Immediately
It’s very important that you establish good credit right away for your company, so it looks like it’s being managed well. Lenders are much more likely to approve when they know a company has bills paid on time, and has bank accounts and utility accounts setup with the company name.
Maintain Good Cash Flow
A bank must be confident in your ability to repay on lines of credit before it will approve one for your business. By maintaining good cash flow, good credit standing, and a consistent history of earnings, your business will become very attractive as a candidate for lending.
Don’t Max Out Credit Cards
Maxed out personal and business credit cards do not look good to a lender – it looks like you’re running your business with no margin for error. Besides that, you’ll be paying the highest possible interest rates when you have high balances on your credit cards, and that will keep you in debt longer and deeper.
Conduct Appropriate Research
It’s worth your while to do some research and learn about the various rates being charged by lending institutions for a line of credit, because you can really save some money by finding a more advantageous one.
Apply for Money When Don’t Need It
When your business is going great, that’s the time to apply for a line of credit. Your business looks strong and profitable, and you can repay on the line immediately, which helps to establish and enhance your credit history.
Learn even more about a line of credit here, or contact us at Liberty Commercial Capital today. You can reach a lending associate by phone (317) 569-1110 or via email: info@libertyloan.net. We look forward to speaking to you.