An unsecured line of credit is a valuable source of capital for your organization that does not require collateral. However, some requirements must be met for approval. Building your corporate credit can help you get an unsecured credit line for your company. Here are some ways you can build your corporate credit to get an unsecured line of credit.
Register with credit reporting agencies
Registration with credit reporting agencies, which is free, will ensure you have a record of your business credit. You will be unable to get an unsecured line of credit without it.
Build and maintain a positive banking history
Use business credit cards and lines of credit, maintaining consistent average balances, to create and keep a good banking history for your organization. This will be one factor in considering your unsecured credit application.
Switch to a billing cycle with suppliers
With a billing cycle, you will receive your supplies and pay your suppliers 30 or 60 days later. Some vendors are open to this option because the consistent revenue will also help build their business credit.
Re-register your cell phones under your EIN and business name
Along with equipment or vehicle leases, registering your cell phones under your business name will help establish credit because of the regular monthly payments. You will have a record of paying the phone bills in full and on time.
Apply for business credit cards, small business loans, and lines of credit.
These sources of financing can contribute to your business credit. The Small Business Administration can provide information and resources to ensure you apply for the correct financing for your business needs.
Use credit cards regularly and pay them off in full each month.
Using your business credit cards and paying them off regularly will show that you have a responsible budget. It will also provide a record that will contribute to your improved credit history.
While each financial institution has its requirements for unsecured lines of credit, taking these steps will help move your organization in the right direction. By building your corporate credit, you will have a better likelihood of getting the unsecured credit you want and need.
Contact Sterling Capital Consulting for the commercial financing your business needs.