Are you a business owner seeking that vital boost for growth? If you have an impressive credit score and limited inquiries, you can utilize business lines of credit and business credit cards to take your business to the next level. In this post we talk about what's required in most cases for business credit lines or credit cards, share quick tips on these options, and considerations for you to keep in mind when applying.
📌 Pro-Tip: See which business funding options you may be eligible for here.
The Golden Trio of Business Credit Eligibility:
1. A Robust Credit Score:
- Target: Above 680, with 700+ ideal for lines of credit.
- Why It Matters: It’s a testament to your fiscal responsibility and reliability.
2. Fewer Credit Inquiries:
- The Lowdown: Banks get wary with numerous inquiries in a short span.
- Benefit: Fewer inquiries give you a stronger standing for approval.
3. A Steady Business Track Record:
- Ideal Timeline: At least two years of operational history.
- Importance: It showcases your business’s stability and revenue generation prowess.
Key Takeaway: Fulfilling these criteria? Major banks like Chase, Bank of America, PNC, and Wells Fargo are eager to support your venture. And here's a pro-tip: They fetch credit reports from diverse bureaus. This means you can leverage multiple offerings without overburdening any single bureau.
📖 Further reading: Is a business line of credit or a loan better for my business?
Business Credit Cards: Your Growth Catalyst
- Stellar Feature: Avail 0% interest periods ranging from 6 to 18 months.
- Impact: Make key purchases or balance transfers interest-free, giving your finances the flexibility they deserve.
Key Takeaway: Think of this as a cushion for your business expenses, a chance to manage cash flows better without interest hassles.
Business Lines of Credit: Your Financial Swiss Army Knife
- Unique Selling Point: Some banks require minimal to zero documentation.
- Impact: Borrow according to your needs up to a set limit, ensuring you always have backup capital.
The No-Frills Application Guide:
1. Establish Contact: Ring up your local bank, speak with the business loan expert. 2. Know the Document Game: Not all banks demand extensive documentation. But it's wise to be prepared. Some might need tax documents or financial statements. 3. Dive In & Apply: With a grasp of the requirements, visit your bank. They'll guide you through.
Key Takeaway: For credit cards, the journey is much the same, with online avenues opening up as well.
What You Can Unlock With Minimal Documentation:
- Chase, Bank of America, PNC Bank: Up to $100,000.
- Wells Fargo: Up to $150,000.
A Little Extra Step: Some banks might ask for an account with them. Initiating it usually needs a modest deposit (around $500). It's a small step, considering you can get both the credit line and card on the same day – often with a single inquiry.
Scaling Your Business Credit Ceiling:
Banks often peg your credit limit to 10-25% of your annual income. But here's a trick: Use future income projections.
Key Takeaway: If you tick the boxes of strong credit score, limited inquiries, and a two-year business history, the financial realm is your oyster. Be it with colossal national chains or the friendly local bank, the keys to exponential growth are within grasp. So, why wait? Dive into these opportunities and propel your business to its zenith.