How To Get a Line of Credit for New Business
A business line of credit is perfect for businesses that are looking to get access to financing without receiving a lump sum of money. Unlike a business loan that requires you to pay the full amount in the course of time, a line of credit only requires you to pay the interest on the amount you use.
Choose between a secured and unsecured line of credit
Secured and unsecured are the two main types of lines of credit. Both lines of credit serve the same purpose, but each has different requirements when applying.
Research the requirements needed to obtain a business line of credit
The requirements for getting approved for a business line of credit might be different for every financial institution. Generally, most lenders will look at these factors:
Once you’ve determined your eligibility, it’s time to compare lenders that offer the best deal. Make sure you are checking the maximum credit limits, fees, repayment terms and interest rates.
Gather important documents
Now that you’ve decided which preferred lender you want to work with. Your lender will require you to provide documents such as:
To get a complete list of documents, make sure that you contact your lender before submitting your application.
Submit your application
Lastly, submit your application along with the required documents to your preferred lender. This step can take as little as ten minutes or as long as five business days to get a decision. Your lender may ask you to provide additional documentation after reviewing your application.
If your application gets approved, you will receive a loan agreement to sign before the lender can issue your line of credit.
Starting a business is an exciting venture and CCCU is here to help our local business owners! Visit our commercial banking webpage for all your business needs, or give us a call to speak to our commercial team at 702-228-2228.