How to get a high limit credit line for your business. Credit lines are the most
commonly requested loan program in the business world. Credit lines are popular
because you only make payments on the amount of money you use on your credit
line. Not the entire amount of the line. And as you pay the line down you can
reuse it. Giving you access to ongoing working capital. Even though they are
very popular, true credit lines are rare and hard to find. Many are also very
tough to qualify for requiring good credit good time in business, and good
financials. But there are other credit cards and lines that few know about that
are available for startups, bad credit, and even if you have no financials. Today
we'll be diving into all of these, so you know all of your credit card and line
options. In many cases when you credit lines offered such as ones with
zero percent. These are truly credit cards, not lines. So what's the difference between
business credit cards and credit lines truly. The answer is not much. Credit
cards usually offer zero percent intro rates for up to two years very helpful for
startups especially credit lines. Allow you to take out cash at a much cheaper
rate than do cards. These are the main two differences that will affect you
between credit cards and credit lines. Investopedia even says that lines of
credit are potentially useful hybrids of credit cards, showing how similar they
really are. Both cards and lines are revolving credit, credit lines are harder
to qualify for as card approvals are typically very fast many times automated.
While lines require an in-depth underwriting review. Lines usually offer
lower rates according to Bank rate card rates average 13 percent. While lines
average 4 percent without a debit card. Lines aren't as easy to access as cards
because cards are used everywhere. Most banks offer unsecured business credit
cards. Most of them do report to the consumer credit reporting agencies. They
all require a personal guarantee from you. You can get approved usually for
one card Max as they stop approving you when you have two or
more inquiries on your report. Let's look at some business credit line and card
options. Most credit card companies offer business credit cards including Capital
One, Chase, and American Express. These have rates similar to consumer rates and
limits are also similar. Some report to the consumer reporting agencies. Some
report to the Business Bureau's approval requirements are similar to consumer
credit card accounts. Typically when you apply for a credit card you put an
inquiry on your consumer report. When other lenders see these they won't
approve you for more credit because they don't know how much other new credit you
have recently obtained so they'll only approve you if you have less than two
inquiries on your report. Within the last six months and more will get you
declined. With unsecured business financing or UBF you work with a lender
who specializes in securing business credit cards. This is a very rare very
little known about program that few lending sources offer. They can usually
get you three to five times the approvals that you can get on your own.
This is because they know the sources to apply for the order to apply and can
time their application. So the card issuers won't decline you for the other
card inquiries. Approvals usually range from 2,000 dollars to 50,000 dollars. The result of
their services is that you usually get up to five cards that mimic the credit limits of your
highest limit account now. Multiple cards create competition
and this means you can get your limits raised. Typically within six months or
less of your initial approval. Approvals can go up to 150 thousand dollars per entity such as
a corporation. With UBF they actually get you three to five business credit cards
that report only to the business credit reporting agencies. This is huge
something most lenders don't offer or advertise. Not only will you get money
but you build your business credit also. So within three to four months, you can
then use your newly established business credit to get even more money. The lender
can also get you low intro rates typically
zero percent for 6 to 18 months. You'll then pay normal rates after that typically 5 to
21 percent APR with 20 to 25 percent APR for cash advances and they'll also get
you the best cards for points meaning you get the best rewards. Just like with
anything there are huge benefits in working with a source who specializes
in this area. The results will be much better than if you try to go it alone.
You must have excellent personal credit now preferably 700 plus scores the same
as with all business credit cards. You shouldn't have any derogatory credit
reported to get approved. You must also have open revolving credit on your
consumer reports now. You'll need to have two inquiries or less in the last six
months reported. All lenders in this space charge a 10 to 15 percent
percent success-based fee. You only pay the fee off of what you secure. Remember you get
a ton of extra benefits and about three to five times more money with this
program than you'd get on your own. Which is why there's a fee the same as all
other lending programs. You can get approved using a guarantor. You can even
use multiple guarantors to get even more money. There are also other cards you
can get using this same program but these cards only report to the consumer
reporting agencies, not the business reporting agencies. They are consumer
credit cards versus business credit cards.
They provide similar benefits including zero percent intro APRs and five times the amount
of approval of a single card but they're much easier to qualify for. You can get
approved with a 680 score in five inquiries in the last six months. You can
have a BK on your credit and other derogatory items. These are much easier
to get approved for than UBF Business cards. With all previous cards mentioned
you need to have good consumer credit to get approved. But what if your personal
credit isn't good and you don't have a guarantor. This is when building business
credit makes a ton of sense. Even if you have good personal credit. Building your
business credit helps you get even more money and without a personal guarantee.
Business credit is credit in a business name that's linked to the business's
Employment Identification Number, not the owner's Social Security number. When done
properly business credit can be obtained with no personal credit check and no
personal guarantee. Something all other cards mentioned can't deliver. You can
get three types of business credit cards. Vendor credit offers net 20 terms
used to start a business credit profile. Store credit, get credit cards with high
limits at most stores. Cash Credit, Visa, MasterCard, American Express cards you
can use anywhere. These can be obtained with no credit check or guarantee. Limits
are often five to ten dollars to start and exceed 50,000. Some alternative lenders
are now offering lines of credit for 50,000 to 150,000 dollars. This is a
minimal doc program usually only requiring tax returns instead of all
income docs. If over 100,000 you're going to need profit and loss and balance
sheets. These take much less time to close than conventional bank lines of
credit 30 to 45 days to close and fund. Rates are low on these usually ranging
from 7 to 10 percent. Your approval amount is usually 10 percent of your annual
sales for their tax returns. You'll need an experience score of 700 or higher to
qualify. Some conventional banks and private
lenders also offer high limit credit lines. You might see limits of 50,000 dollars to
250,000 dollars. These are the types of accounts that I see most business owners truly
want. Approvals require good personal credit and you must have good business
tax returns for two to three years showing increasing profits. The net
revenue on your tax returns will be equivalent to the amount you can get
approved for. Some sources will require collateral but most don't. You will need
to supply a personal guarantee for approval. This is a full documentation
program. You'll need tax returns, P&Ls, balance sheets, Bank statements, for both
personal and business to get approved. You'll also need really good personal
credit 720 scores or higher with no derogatory credit underwriting and
closing can take 60 to 120 days sometimes more. Some are guaranteed by
SBA. Cash advances also known as merchant
advances revenue lending and cash flow financing are a great way to get fast
and easy money. You can get approved if you have been in business for one year
or more. Even if your FICO is as low as 500 this is about the only type of
unsecured financing that doesn't require good personal or business credit for
approval. Some lenders are now offering credit lines instead of straight
advances. Actually, the lender will usually approve you for both, a loan, then
an extra line of about 20,000 dollars then an extra credit line of
about 20,000 dollars. When you apply upon approval you'll be offered
the credit line if you qualify. These are a little harder to qualify for than just
the cash advance. You might need better credit or a compensating factor. Funds
must be used for the betterment of the business. Looking for 20 percent profit margins
for approval. So to get approved they often want to see your tax returns.
Unlike regular advances where all they want is bank statements.
Contact us today to discover more about how to get a high limit credit line for
your business.