If you are looking to get a business line of credit in the near future there are certain things you should prepare for in order to maximize your chances of successfully getting funding Erie it we will be discussing these necessary preparations in today’s article.
The first thing you must do when looking to get a business line of credit is to look over your financial reports and see where you can make cuts in order to minimize your monthly expenses. Your revenue to expense ratio is a very important factor in your ability to receive funding. Most lenders like to see a healthy margin of error in between your monthly expenses and your monthly revenue as this indicates that you will still be able to repay them in the event that your company takes a turn for the worse.
The second thing that you will need is a well organized formalized business plan. This is not a generic document that you may have already created for your own purposes but instead is a specific document which outlines all future business expenses and revenue as well as current expenses and revenue. If you need assistance creating a document like this you should contact your local small business administration office for assistance. They should be able to assign a consultant to your company with years of industry experience who can help you walk through the details of this.
Once you have your accounting finances in shape and you have gone through and created your formal business plan you will need to pull up your business credit reports to review it for errors or anything that you may not expect to be on it. It is important to remember that your business has a credit score which is separate from your own and they operate on different scales. Business credit scores Max out at 600 points whereas personal scores Max out between 800 850 points. If your business credit score is lower than 400 or you have not yet established any credit it will be difficult to get a credit line from a bank or traditional lending institution. If you are not able to do so through a bank you can look for the same service online but keep in mind that interest rates may be higher.
By preparing your company first and making sure you understand where you stand on credit you will increase your chances of getting your business line of credit from a bank.