Securing Business Line of Credit, No Personal Guarantee Loans

You have always wanted to be an entrepreneur and have saved up quite a bit to start your own business. However, what you have saved will not cover all your business expenses. You have a few options to obtain the required funds to invest in your dream project. You can either obtain a business line of credit with no personal guarantee loan or use personal loans to fund your business. While a business loan is much more difficult to get, it is less risky than opting to use personal credit for business purposes.

When you use your personal credit for business purchases, you are reducing the amount of funds available as credit for personal needs and emergencies. Moreover, if you are unable to repay the loan – because your business fails – your personal credit history will take a hit. Though no entrepreneur expects the business to fail, statistics show that only 5 percent of startups survive beyond five years. So, you have to be prepared for this eventuality as well.

Business credit comes in various forms under various names such as small business loans, unsecured business credit, merchant cash advance, small business credit, and business cash advance. Though the terms and conditions of the loans may vary, they all essentially provide credit to businesses.

A small business needs credit for a multitude of reasons such as diversification, advertising, purchasing equipment or property, and so on. Loans for some of these are easier to obtain. For instance, a leasing finance company will lend you the required funds to purchase equipment you need and hold the equipment thus purchased in lien. This secures the loan, thereby leading to a lower interest rate. Even when you opt for a business line of credit no personal guarantee loan, explore such opportunities first and take advantage of the lower interest burden.

Even if you are unable to offer any collateral, financial institutions will lend you the amount you require. The only issue will be the interest rate, which is bound to be higher. To obtain such loans you need to get your business papers in order.

First register your business with the proper trade bodies. Next, get any licenses and permits that you require form the authorities. Once you have done this, register your business phone number with the 411 directory assistance service. Most creditors check for compliance in these issues before they sanction the loan.

Yet another requirement that you need to fulfill is to get a proper balance sheet. Not only does the balance sheet need to reflect the true state of affairs, it also needs to be easy to understand. Along with the balance sheet, provide a business plan and projected earnings information. Ensure that the projected earnings are based on ground realities and supported by authenticated data. This will soon help you obtain a business line of credit no personal guarantee loan. Creditors typically need to be convinced of your integrity as well as the soundness of your business plan. If they feel that your business will be able to repay the loan, they will have no hesitation in lending to it.

Source by Sherry Gabriel W Gain

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