Unsecured Lines of Credit – Can You Get One?

One financing option which I have given less attention to in this blog than to other options is the “Unsecured Line of Credit”. This financing method has two things in common with business cash advance: “unsecured” and “financing”. That is where the similarities end.

Unsecured lines of credit are gaining in popularity (among those who qualify) because so many small business owners are finding that despite impeccable credit and excess equity in real estate, real estate just doesn’t cut it any more in today’s economy. In short an unsecured line of credit is supposed to make financing much more accessible to businesses. In reality… it is still pretty tough to get.

Here are some key things to keep in mind if you are looking at this option for financing your business:

  • It takes 4-6 weeks to obtain an unsecured line of credit. That is, if you are approved.
  • You can’t really apply for an unsecured line of credit yourself – generally, you need to hire a specially trained financial consulting firm to do it for you. Yes, it really is that complicated.
  • The minimum acceptable credit score is 680.
  • You generally have to have been in business for at least two years.

I stopped here. I suppose working for FastUpFront makes me a bit biased, but compare the above with the following points on credit card factoring and you’ll understand my disgust. With credit card factoring:

  1. It takes less than 24 hours to be approved.
  2. Application is simple, you can do it yourself and don’t need to pay anyone fees to apply for you.
  3. There is no credit check.
  4. You can have been in business for as little as four months if you have been getting credit card receipts for that time.

I hope you can see why I think credit card factoring is so great. However, there are cases when you may want to consider an unsecured line of credit… like if your business doesn’t take credit cards!

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