One thing is expected in every business, and that is cash flow fluctuations. In such times, businesses depend on the most flexible, useful, and unsecured financing option of a line of credit. They are popular for their easily accessible cash at low-interest rates. An instant business line of credit acts as a safety net for those companies which often get stuck in cash flow fluctuations and are unable to pay their vendors, lenders, employees, and themselves.
Let us discuss how your business can qualify for lines of credit for small businesses-
How Your Business Can Qualify for a Line of Credit-
Like any other business loan, the qualification of your business for a line of credit is evaluated through three primary pillars, namely, your personal credit, your business credit, and other business finances. Here we discuss the qualifying factors for how to get a large business line of credit in detail-
Factor #1- Your Personal Credit Score: Every credit reporting agency considers the following five factors while calculating the personal credit score-
- Payment history: The major amount of factor affecting your credit score is the payment history and failure to make timely payments. The agencies check when the delinquency occurred and what its level was. They also investigate your last activity date to get a complete report on your personal history.
- The amount owed: Next factor is your total debt in the various accounts. The agents also check your overall installment, revolving utilization, and individual account utilization.
- Length of credit history: Details assessed in the length of credit history are the age of the oldest account, the average age of accounts, and a mix of newer and older accounts.
- The mix of credit: This factor weighs only ten percent of the total and accounts for the types of credits you have in your file like mortgages, credit cards, loans, and more. In general, a mix of credit is healthier than a repetition of similar credit types.
- Inquiries: The last factor is inquiring about the number of new credits you acquire. The agents also check the frequency of receiving credits. The shorter the time, the worse its effect on your credit score.
Factor #2- Business Credit: Business credit scores range from 0 to 100 compared to personal credit scores ranging from 300 to 850. A higher score means greater credit worthiness. It is crucial to make timely payments to get a higher score from your lenders.
Factor #3- Business Finances: Your lenders will closely assess your business financial history and current situation. They will check your tax returns, trade references, and bank references to calculate your score.
About Total Merchant Resources-
Are you looking for a first merchants business line of credit? Total Merchant Resources has reinvented small business financing by offering reasonable credit standards, minimal documentation requirements, and fast approval. Total Merchant Resources financing empowers you, the small business owner, so that you never again have to let small capital needs stand in the way of big business opportunities. Our products include small business loans, line of credit, equipment leasing, fix and flip programs, and web services. Call us at +1 (732) 671-5710, email us, or visit our website for more information about our services.