If you decide to get a small business line of credit online from Personal Money Service, you need to make definite preparations. We will search for the best lender, but you will need to check your financial management and get all your business documents in order. Be ready to provide your lenders with your business financial statements to prove your good financial history. Or you may choose to show business tax returns.
Pay attention that some lenders may demand to show your personal credit score. For you, it’s not a good option, as it’s always better to keep your business and personal finance separately. So, try to select from the lenders that ask to show only business credit score.
At first, check your banks, as they may offer good terms for your needs. In case you find a better proposition from the other bank, you may consider leading your finance with it in the future.
What Is a Business Line of Credit Used For?
Though most of the borrowers confuse business loan and business line of credit, those are not interchangeable. In the case with a business line of credit, there are no lump-sum disbursements that are made when an account is opened and require a payment every month.
Also, a business line of credit is a way to get access to short-term funding. An unsecured line of credit is a good option if one does not have a specific purpose for borrowing money and might use it for a business checking account, a small business credit card or even a Mobile Banking app.
However, just like in case with any borrowing, lenders both traditional and online ones will require the borrowers to provide the records of having strong revenue, a few years of credit history and in certain cases – a collateral.
Other documents one may have to present are:
- personal and business tax returns
- bank account information
- profit-and-loss statements
- a balance sheet
Those, who have a score starting from 500, have more chances to get an approval.
A business line of credit is not an option for the startups as the business must exist at least for six months and generate at least $25,000 annual in a year.
When all the preparations are done, you need to make an application that is often done online. Once you agreed on all terms, you will get an access to money funds.
Bonus: Read how to get money with a bad credit score.