Shortly after any new business registers their company name and receives an EIN, the brochures and emails start to inundate the office for unsecured credit cards. Unsecured credit is a wonderful thing, but the introductory business credit card offers fall away with their high interest rates and qualifications. The truth is, most new businesses do not meet the qualification for the “great deals” advertised in the brochures, and even banks will only offer secured credit for new businesses, because they consider entrepreneurs to be too risky. Fortunately, there are two big ways entrepreneurs can get access to unsecured lines of credit without having to wade through the red tape of major carriers and traditional banks.
Asset-based lines of credit are structured around the total value of property a business owns. This includes everything from real estate, to equipment, and even receivables. This line of credit can be used at anytime for anything, and it is a revolving line, so the total spending limit can be replenished. The most attractive aspect of asset-based lines of credit is that the amount of credit available increases as the business grows. For instance, if the volume of sales goes up, new equipment is purchased, or if the business moves to a larger (owned) facility, then the spending limit will also reflect that growth.
Unsecured Credit Through Commercial Finance
One of the easiest ways for new businesses (as in, operating for under two years) to get access to unsecured credit is to work directly with a commercial finance company. Commercial finance companies are not limited by red tape and other restrictions which prevent entrepreneurs from getting the funding they need. Instead, commercial finance professionals typically have the capital reserves to cover the amounts needed – whether it is for asset-based lines of credit, or full unsecured credit lines. Most commercial finance credit lines start at $25K for newly launched businesses, but that number can increase based on current credit standing and profitability, with some lines reaching as high as $500,000.
Get the Details
If you are about to launch a new business, or if you are running a relatively young operation and would like to learn more about unsecured credit options, call Abel Commercial Funding at 301-200-9801. Our team of finance professionals works with entrepreneurs across all industries to get them the funding they need, and the unsecured lines of credit they deserve.