Lack of consistent access to cash is a common challenge among start-up business owners, especially when they haven’t earned a profit yet. One way to get the money you need to purchase supplies for your business and keep your finances organized is to obtain a business line of credit. This is similar to a credit card in that the account is revolving and you borrow against it multiple times.

However, lines of credit typically have much more credit available to spend than the typical business credit card. You can also withdraw cash against your credit line or write yourself a check with this type of borrowing.

How Banks View Business Lines of Credit

Lenders do not like to see small business owners use lines of credit as a way to manage daily cash flow challenges. This concerns them because they fear the business may not earn enough money to keep up with the repayment requirements for the business line of credit. Instead, bankers prefer that business owners take out this type of loan to meet cyclical financial needs for their business. They also like to see borrowers pay down one charge before taking out another.

Preparing to Apply for a Business Credit Line

Although you typically don’t need collateral to apply for this type of business loan, you will need to submit a personal guarantee that you will repay the money. The only time you could need collateral is when your business is very new and the lender wants more of a guarantee that you can repay the loan beyond the financial resources you submit.

You should come to the appointment prepared to show documents such as your start-up costs, projected income and expenses, bank statements, and tax forms from past years. You might also consider an alternative lending source such as JNI Lending for your business financial needs. Please contact to learn more about our available options.