The big advantage of obtaining an unsecured line of credit is that you don’t need to offer any business assets as collateral, which means you can’t lose those assets if you should default on the loan. In most cases though, it means you’ll need a really good credit score to qualify, and you’ll also need to have been in business for several years to demonstrate stability. Some lenders may also require you to have a specific annual revenue income before they’ll consider your request.
Qualifying for an unsecured line of credit
When you apply for an unsecured line of credit, the lender will review the status of your business, and may also investigate your personal income situation. Most lenders want to know that you’ve been in business a while and are an established company, and they’ll also take a good look at your cash flow. If you’ve been regularly experiencing cash flow issues, it will be a definite red flag for the lender. Sometimes a newer business can get an unsecured line of credit by accepting a smaller line of credit amount, at least until they become better established.
Once you’ve been in business for a time and have established good credit, you may be eligible for a larger line of credit. Some lenders also will increase your line of credit after you’ve shown that you can consistently pay back borrowed amounts on the credit line, and are not maxing it out soon after obtaining it. The amount of any line of credit you receive will always depend on the age of your company, your credit history, your business revenues, and your business expenses.
Looking for an unsecured line of credit?
Of course, it’s easier to qualify for a secured line of credit by using business assets as collateral, but if you lack these business assets, you may still want to apply for an unsecured line of credit. Contact us at My Commercial Capital to see if you’re eligible for one of these loans, and our specialists will be glad to work with you in that regard.