Welcome back guys and thanks for joining me. Today we're going to talk about how
to get a business line of credit. A
business planning credit is actually one of the most sought after financing
products by small business owners today. Everyone wants a business credit line. If
you're looking to get a business credit line, a few things that are going to be
important when applying and things that we're going to look at. One, we're goign to need
a simple application and we're going to want to see that you've been in business
for at least one year. We're not focused on real estate collateral where a lot of
lenders are. Really going to want you to have some sort of hard asset or real
estate collateral in order to issue you a credit line. We actually don't need
that which is really cool and very helpful. We're really going to be focused
on the most recent months cash flow in your business. We don't need to see
millions of dollars of cash flow but we need to see at least 10 to 20
thousand dollars a month in revenues. And we want to see that you're keeping a
decent average daily balance in there and don't have multiple NSF or overdraft
fees. That's going to be really important because again, we're not using any type
of real estate collateral. Profitability on your tax return isn't necessarily
necessary. And there's some different things that we'll look at and back
things out on like depreciation and other expenses. But it's going to be
important that you're going to have at least 3 to 6 months of your
business bank statements together. Sometimes depending on the on the line
side, if we start getting above 100/150 thousand
we may need up-to-date or recent financials. We may need a tax return.
There are some products that are under a hundred thousand where we don't need a
tax return or any financials and it's a very simple and quick and easy process.
Simple one-page digital application, 3 months bank statements and we can
usually have you an approval within about 24 hours. Credit score wise. So, we
have some credit line options that are available that with credit scores as low
as about a 580 and that's kind of about the the lowest you can go to
get a true revolving line of credit. We also have options available to people in
the 700 credit score range as well too. So, there is a wide range of options
available there's some different lenders that focus on different guidelines and
criterias and depending on where you fall
makeup which lender would make sense for you. Once, you have the application
completed 3 months of bank statements, you'd be just about ready to
be submitted into underwriting. But tip number one that I mentioned earlier
which you would want to know is the credit line a true revolving line?
Meaning that if you get approved for an example, $100,000 and
you draw $40,000, that means you'd have $60,000 remaining. If you
pay that 40,000 back that you used 2 or 3 weeks later, is that
money available again? Some credit lines work once you draw that 40,000,
you only have 60 remaining and you're on a repayment schedule for that
$40,000. That can seem a little bit confusing. But someone on my team
could help you, help explain in a little bit more detail with that. Tip number 1,
is the credit line a true revolving line of credit? This is a very important
question. Some credit lines are structured where you have the ability where
you can draw money and repay. And that money becomes available again. And some
credit lines work where you draw that money, it's not available again and then
the remaining balance is only available. This is a really important question to
ask and something that you definitely want to know because depending on how
you're looking to use the line, that can be really important. If you're going to
use it to purchase inventory and on the ongoing basis then you're absolutely
going to want the line to be revolving. So as you borrow money and replenish it,
it becomes available again. The other great thing about that is on a revolving
credit line, once you replace it, you've only paid interest on the money that you
used and for as long as it was outstanding. Which can be a huge money
saver. So true revolving credit lines can really work great for any type of
business or industry but they really work rate with people in the
construction industry. When they get a new job they can have cash on hand to
take on additional job so they have the money to buy materials and lay out for
salaries and additional people that they might have to staff for that job. Works
great for medical offices. If there's a slowdown in receivables, you can use it
to fuel your payroll or work in capital in the practice. Great again for
transportation companies. They can use it to... Transportation companies use it to
bringing additional clients so they can have enough money to lay out all their
upfront expenses like gas, drivers and things like that.
Or if there's ever a slow in any type of payments, most people in the trucking
business get do a job and then get paid 30 to 60 days later. So if there's
ever a slowdown in those receivables, you have money on hand to keep your business
and operations going. So, it's super important depending on what industry you
are or how you're going to use that credit line to know if it's true revolving or
when you pull the money. That's it. Great question to ask. Tip number 2, what are
the terms of the line and does it reset? So meaning, a lot of lenders will give
you a credit line which they give you the flexibility to pull and draw funds
whenever you need it. Which is great but they want to check in with your business
and make sure the business is still healthy.
So typically, most lines will reset or go into a review every 12 to 24 months and
it can vary from lender to lender. It's super important to know that and to make
sure when that review is going to take place, what that review process is. Some
review processes are very simple. Minimal paperwork. Some were a little bit more
in-depth. But you really want to know what that review process is so when
you're going to get the line, you could have that in the back of your mind. You
keep it in mind for when that term is coming to do that you can have
everything that you may need in order. And also make sure leading up to that
that the business is in a great place and you know that that line is going to
be eligible to renew. So that's really important. Tip 3, will the credit line
grow with your business? It's a really good question to ask. If you're growing
your business, most likely when most people are growing, they need even more
money. So, you're going to really want to have to work with a lender that has the
flexibility to work with you and to grow your line as your business grows. Great
question to ask. A lot of... A lot of lenders do this. You know, some don't.
Everyone has a different process around this. But it's a good question to ask.
Does the line grow with you? And what would you need to do in order to
increase your credit line? Another important thing is when you're going for
a credit line, if you're approved for a larger amount, always take the larger
amount. With most credit lines, you only pay for what you use. So even if you get
approved for $200,000 and you only 50,000, take the $200,000 credit
line. And only use 50. You only pay interest on the 50 but you have the
ability and flexibility to have additional funds available if you may
need it for any opportunities or challenges that
could arise in the business. WSo we've been able to streamline the application
process and minimize the documentation needed in order to get a business line
of credit. We also have about 75 plus lenders on our platform and have
provided about a billion in financing to small business owners all across the
country over thousands of transactions. Depending on your industry, your needs
there are a number of different credit lines out there. You really want to make
sure that you work with the company that can provide multiple options back to you.
And as mentioned, we have 75 lenders on our platform. What we'll do is a simple
phone call, understand what you're looking to get accomplished based on
your needs, based on your industry type and based on a few other criterias about
yourself in your business. We'll make up the right lender in the right line for
you. And we can help kind of sort through that and place you with the right
lenders in order to get you the best line available on the
market today. There's hundreds of lenders out there
but there's only a dozen lenders that you really want to work with for a
business line of credit. In the description below, we'll put a link to
our website and we'll help you find a business line of credit that makes sense
for you and your business. Be sure to subscribe and we'll see you tomorrow.
Thanks for watching, have a great day.