Unsecured lines of credit can be some of the most useful business tools in existence for cash flow management. Unsecured lines of credit can insulate you against unexpected costs, late payments from customers, and even higher than usual payroll requirements. While it may be easier to secure a line of credit when you can offer collateral to a lender, not all businesses have the kind of assets which can be used as collateral. Here’s what you can do if your business lacks such collateral, and is obliged to seek an unsecured line of credit.
When to apply
The important thing to remember about unsecured lines of credit is that you should apply for it well before the time you actually need it. Once a crisis has developed and you have serious need of a line of credit, it will take too long to go through the application process to be of real help in solving your temporary problems. Once unsecured lines of credit have been established, they are always invaluable in solving unexpected crises quickly.
What you will need
To apply for unsecured lines of credit, you will need bank statements for about the last six months, which clearly demonstrate that you have a positive cash flow. You’ll also need to provide profit and loss statements detailing your expenses and your incoming revenues to a lender. All the normal business information must also be provided to a lender, including how long you’ve been in business, what kind of business you do, identities of all company owners, and your personal credit score.
Whom can you apply to?
If you apply to a bank for an unsecured line of credit, you can probably expect to be denied, unless you have outstanding credit history, since 80% of all applicants are declined. However, there are a number of alternative lenders who don’t place as much emphasis on credit history and credit score, that may be willing to work with you, providing you can show that your business is profitable and well-managed.
Lines of credit with Value Capital Funding
A business line of credit can help your company survive all kinds of shortfalls and gaps in cash flow. Contact Value Capital Funding today to find out how we may be able to help you secure unsecured lines of credit that will be extremely beneficial for your business.