One of the biggest reasons that startup businesses fail is that they simply run out of cash, and cannot meet the requirements of day-to-day operations. One of the best ways of avoiding this pitfall is by establishing unsecured lines of credit for your company. The great thing about an unsecured line of credit is that it is not tied to any collateral or business assets, and does not really require any kind of documentation for approval.
Unsecured lines of credits for startup companies
You may have heard that it’s impossible for a startup company to get an unsecured line of credit, but this simply is not true. As a startup, you may lack the company history that others have, but you can still get a line of credit if you have really good personal credit history. Normally, lenders like to see at least $25,000 in business revenues before they will consider extending an unsecured line of credit to a company, but if your personal credit history is immaculate, you may still be able to qualify.
How much can you qualify for?
Generally speaking, you can usually qualify for an unsecured line of credit in an amount equal to four or five times the amount of your highest personal credit card. However, this figure will also be influenced by how much existing credit you have outstanding, and how long the payoff period would be for your current outstanding balances.
How much money do you need to raise?
As a general rule, it’s best to raise as much money as you can, so that you’ll be able to cover unforeseen business circumstances as they arise. As regards an unsecured line of credit, the highest possible amount is what you should shoot for, because you won’t incur any charges unless you actually use the money available to you. That’s another great thing about an unsecured line of credit versus a traditional bank loan, and it’s a good reason for you to try to get the maximum amount when applying for an unsecured business line of credit.
Business lines of credit with Flex Capital
If you have been searching for unsecured lines of credit, we may be able to help. Contact us at Flex Capital, so we can discuss the possibility of providing your company with a business line of credit today.