New Business Line of Credit
	When establishing a new business line of credit (either for an existing business or for a newly formed company) it is extremely important that have a clear cut understanding of how you intend to use the credit that you are seeking. With today’s economic climate, more and more banks and lending institutions are demanding the borrowers provide the lender with a clear understanding how these funds will be drawn down from the line of credit, what repayment period is expected, and whether or not your business will be able to afford a new business line of credit. In addition to providing the lender with an understanding of how debt funds are to be used, you will also be required to submit business loan forms that outline the income generated by your business (or from your job) over the past three years. You will also need to submit credit reports from each of the three major credit bureaus. This has now become a requirement among lenders as the “stated income” and “stated credit” loans that were extremely popular three to five years ago ultimately caused much of the downturn that the economy has faced during the recession. When drafting a business plan for a new business line of credit you will need to substantiate all of the claims that that you have provided within the credit line application. This will include provided qualified appraisals on any and all property that will be acquired through the usage of the credit facility, the cash flows currently generated by the business coupled with an examination of the anticipation of the cash flow that will be produced by the once the new business line of credit has been established, and personal financial statements that showcase the fact that the debt can be repaid in the event of a default. Even if you do not currently need a new business line of credit (ie..you are doing very well), it may be in your best interest to establish the line. This is due to the old adage that banks and lenders only like to extend credit to businesses that do not need it. If you business is in a difficult economic time then your chances of acquiring a credit line become less and less. Additionally, establishing and maintaining a new business line of credit can increase not only your own credit score but that of your business as well. This is especially important for new businesses that will have a plan to acquire additional funds in the future. Much like you, your business also has a credit history. When you acquire new credit facilities your business builds a credit report very similar to the one that established for you when you turn eighteen. We encourage you to peruse the articles provided throughout this website that focus on the nature of establishing new business lines of credit along with the additional issues that you will face when completing the credit application.
	Below are a number of articles that you can read that will assist you in obtaining a business LOC:
	Business LOC vs. Business Loan Securing a Business LOC Do You Need a Business Plan to get a Credit Line? How has the Economy Affected People's Ability to get Credit? Unique Business LOC Types Property Rehab Loans and Lines of Credit What is a Warehouse Line of Credit? Businesses Best Suited for a Business LOC Alternatives to Business Credit Facilites Using Personal Credit Cards Instead of Business LOC The Mechanics of a Business Loan The Mechanics of a Business Line of Credit Importance of Establishing a Business Line of Credit Using a Business LOC for Startup Capital Questions That Will Be Asked By Your Banker The Importance of Personal Credit When Obtaining a Business LOC What is an SBA Backed Business Line of Credit? Determining How Much You Can Borrow Through A Business LOC How a Business Line of Credit Should Be Used Comparing Offers from Banks for Business Lines of Credit Business LOC and the Concept of Leverage Secured Vs. Unsecured Business Line of Credit Using a Business Loan/Credit Line Brokerage Repayment of a Business LOC Commonly Used Terms in Lending Using a Small Bank to Obtain a Business Line of Credit New Business Line of Credit Business Revolving Line of Credit Overdraft Line of Credit Small Business Lines of Credit Accounts Receivable Backed Lines of Credit