Business Line of Credit Underwriter Secrets Revealed

Financial independence is the American Dream…and for many, acquiring capital for their business is the surest path to realizing that dream.

Obtaining signature (unsecured) loans through traditional lenders can be difficult for new businesses because lenders prefer to loan to businesses with established financial histories.

Getting your loan application approved to obtain the business capital you need in this market is increasingly getting more and more difficult. Just about every other week it seems like we hear about another bank being taken over by the federal government. With all of this market volatility, no wonder banks are reluctant to lend.

The business loan application itself as well as making sure your loan gets approved for your business can be a daunting process. A recent study has shown that over 80% of small business loan applications are declined due to presentation alone!

The good news is that business capital can still be obtained, even in this current credit crunch market. Borrowers with good credit can still get approved for unsecured signature business lines of credit up to $250,000. Borrowers with really good credit can obtain these lines without having to show any type of financials such as business tax returns, balance sheets, profit and loss statements, etc.

These loans often times come with an interest only payment, which can be great for cash flow purposes. Rule of thumb calculation is for every $10,000 "rough" payment would be around $65.00. The term can range from 1-5 years, based on overall qualifications. As long as you pay the loan on time it can be continually renewed each year, even after the initial term expires.

Remember, the lender is in business to make money and the lender only makes money if you keep borrowing…and paying on time. As long as you are a good paying customer there is absolutely no reason that a lender or bank would want to terminate that relationship!

If structured properly, these loans will not show up on your personal credit! Proceeds can be used for expansion or to float the business during slow times. There are simple processes you need to follow to ensure you application is approved - the first time.

The first process is based on your personal credit. 680 Fico score minimum. Most lenders use Experian score and the higher the score the higher the approved loan amount. Credit guidelines also include the "rule of 5"- At least 5 trade lines or creditors. Each one opened for at least 5 years. You must also have at least one credit card with a credit limit greater than $10,000. If you meet this criteria, then you are in great shape!

One quick note regarding credit; make sure that your "employer" information is reporting correctly. Employer information such as name and address must match your bank loan application. Do this first as you don’t want a lender’s underwriter digging deeper into the credit file. The more they look at the credit the better the chance they have to find a reason not to approve your business line of credit loan application.

The nest step requires that you own a business for at least 2 years. The type of business entity does not matter; sole-Proprietors, Corporations, Limited Liability Companies, etc. You can even buy an existing business to meet the 2 year seasoning requirement! If you use this method, please keep in mind that the ownership must be seasoned for 90 days before applying for business lines of credit.

As the company begins to generate revenue, you can obtain more capital. The limits are endless as long as you remain a good paying customer.

You can request credit line increases every 6 months. You can also take advantage of credit partners. Most lenders will want you to open a business or personal account with them. This shows them you are interested in a relationship with the bank. As you grow your relationship with each bank you will have access to more capital. Rates are based on Wall Street Journal Prime rate plus a margin of usually 1% - 3%.

Paul Chavez is Capital Advisor with over 10 years of experience specializing in assisting small business owners procure capital using unsecured, no documentation business loans and lines of credit. Free consultation, no obligation. Let our expertise help you raise the business capital you need.

Business Line of Credit Underwriter Secrets Revealed
Learn how to access $250,000 or more without any financials