All too often, entrepreneurs experience growing pains with their new business. In the early stages of a business, cash flow issues are common by delayed accounts receivable or not enough clients. Having working capital can help your company achieve financial stability and also achieve your business expansion.
Can My Business be Qualified for a Business Line of Credit?
As a startup, it’s very challenging obtaining a new business loan with your bank. Typically, the minimum requirement for an accounts receivable loan is at least 18 months in business, with a proven track record of healthy accounts receivable. There some are exceptions of factoring your account receivable. For example, if you had a temporary downturn with your business, thereafter, your company is back on track in receiving healthy accounts receivable. Fair credit is okay with some accounts receivable financing.
An Asset Based Loan is a business line of credit that requires a minimum of 24 months of established business, healthy accounts receivable, besides having your tangible assets as collateral, and also good personal credit.
Purchase order financing does not require a minimum time of established business, its invoice financing.
A daily ACH business loan only requires good deposits. You must be careful with these types of business loans because they may hurt your cash flow than help your cash flow. Also, you must ask the lender if there are any pre-payment penalties, I have seen some prepayment penalties as high as $10,000 existing out of an ACH loan.
Alternative business lines of credit start with a minimum of a 600 credit score with a healthy business bank account, payments are taken out out weekly.
Getting Prepared for Your Business Line of Credit
Before you consider applying for a business loan, check your credit at Experian. You will not be penalize your credit score with additional inquiries on your credit report when you order your credit report directly from the credit bureaus. Remember, First Pro Capital is here to help you with your business and credit.
For more information on how we can best serve your small business lending in Fort Myers FL and Estero, please fill out the online contact form about your concerns or give us a call at 239.260.4602 . Read what our valued clients have to say about First Pro Capital on our Testimonials page.
Allow our team of professionals to assist you!