Just about every small business in this country would benefit by having a business line of credit available, so as to handle the myriad emergencies and cash shortfalls which crop up, almost on a daily basis. When you’re applying for a line of credit, there are a number of mistakes you might make which will reduce your chances for approval.
Make sure you avoid the following blunders when applying for a business line of credit.
Applying when it’s too late
There’s an old saying about applying for a line of credit which says that the best time to apply for one is when you don’t really need it. If your business is in great shape and you’re practically debt-free, this is the perfect time to apply for a line of credit. If your business is in trouble and debt-ridden, it’s already too late to apply.
Rushing the process
Most business owners have very busy days where they are constantly fighting fires, or at least supporting normal operations. Filling out an application form for a line of credit should be done at a time when you’re stress-free and not racing around to manage the business. If you rush through the application process, it’s bound to show up with mistakes and oversights that will harm your prospects for approval.
Failing to present your business in the best light
This is something that can happen when you don’t take time to fill out your application correctly, and it can be serious enough that it automatically disqualifies your company for approval. Carefully consider all the best aspects of your business when applying for line of credit, so any lender will view your business in the most positive light.
Not being clear about why you need funding
Even if you don’t really have a clear idea about why you’re applying for a line of credit, you’ll need to be very clear about it during the application process. If you can’t specify why you need a line of credit, a lender will be much less apt to approve your application, because you don’t seem to know where you’re going.
Not being honest on your application
If you’re tempted to present a rosier picture of your business than is truthful, you need to resist this temptation. It will almost always be exposed, and that will scuttle any chances you have for a line of credit. You’re much better off being completely honest about your business, and allowing the chips to fall where they may.
Line of credit with IRC Commercial Lending
A business line of credit will provide your company with all the financial flexibility you need to react to the changing business environment quickly. Contact us at IRC Commercial Lending to find out if you’re eligible for a line of credit that will supply you with a reliable cash reserve.