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Unsecured Small Business Credit Cards Can Be Yours

Published By Janet Gershen-Siegel at May 16th, 2019

Unsecured Small Business Credit Cards Can Save Your Business

Did you know that unsecured small business credit cards can be yours? But first let’s talk about business credit lines.

What’s a Credit Line?

A credit line, or line of credit (LOC), is an arrangement between a bank or private investor that sets a maximum loan balance which a borrower can access.

A borrower can access funds from their line of credit any time, provided they don’t exceed the maximum set in the agreement. And this is also as long as they meet all other requirements of the bank or investor like making prompt payments.

Benefits

Credit lines provide many unique benefits to borrowers such as flexibility. Borrowers can employ their line of credit and only pay interest on what they use, compared to loans where they pay interest on the total borrowed.

Credit lines can be re-used, so as you acquire a balance and pay that balance off, you can use that accessible credit again, and again.

Credit lines are revolving accounts similar to credit cards, and contrast other types of funding including installment loans. In many cases, lines of credit are unsecured, much the same as credit cards are.

There are some credit lines that are secured, and because of this easier to get approval for

Popularity

Credit lines are the most typically requested loan type in the business world. And although they are preferred, authentic credit lines are unusual, and hard to find. Many are also very difficult to get approval for calling for good credit, good time in business, and good financials.

But there are other credit cards and lines which few know about that are available for startup companies, poor credit, as well as if you have no financials.

The SBA

Many credit line varieties which most entrepreneurs picture come from traditional banks and traditional banks use SBA loans as their principal loan product for small business owners. This is because SBA ensures as much as 90% of the loan in the case of default.

These credit lines are the most challenging to qualify for because you must qualify with SBA and the bank.

There are two primary kinds of SBA loans you can normally get. One type is called CAPLines. There are in fact five kinds of CAPLines that can work for your business.

CAPLines

You can also get a smaller loan amount more rapidly using the SBA Express program. Most of these programs offer BOTH loans and revolving lines of credit.

According to the SBA: “CAPLines is the umbrella program under which SBA helps business owners meet short-term and cyclical working capital needs”.

Loan amounts are available up to $5 million. Loan qualification requirements are the same as for other SBA programs.

Seasonal Line

This one advances against expected inventory and accounts receivables. It was made to assist seasonal businesses. Loan or revolving lines are available.

Contract Line

Finances the direct labor and material cost associated with executing assignable contracts. Loan or revolving lines are available.

Builders Line

This one is made for general contractors or builders constructing or renovating commercial or residential buildings. It subsidizes direct labor-and material costs, where the building project serves as the collateral. Loan or revolving types are on offer.

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Standard Asset-Based Line

For businesses unable to meet credit standards connected with long-term credit. Funding for cyclical growth, repeating and/or short-term needs. Repayment stems from transforming short-term assets into money.

Businesses continually draw from the LOC, based on extant assets, and pay back as their cash cycle dictates. This line ordinarily is used by businesses that supply credit to other businesses.

Small Asset-Based Line

This is an asset-based revolving line of credit of up to $200,000. This line operates like a standard asset-based line save that a few of the stricter servicing requirements are foregone, so long as the business can routinely show repayment capability from capital for the sum total.

SBA Express

You can get approval for right up to $350,000. Interest rates can be different, with SBA enabling banks to charge as much as 6.5% over their base rate. Loans above $25,000 will need collateral.

Qualifications

To get approval you’ll need great personal and business credit. Plus the SBA says you should not have any blemishes on your report. You will need good bank credit; an acceptable bank score demands you have at least $10,000 in your account over the very last 90 days.

You’ll also need a resume showing you have market experience and a well put together business plan. You will need three years of business and personal tax returns. Also, your business returns should show a profit.

And, you’ll need a recent balance sheet and income statement, thus showing you have the money to repay the loan.

Collateral

To get approval you’ll need account receivables, but just if you have them. When it comes to the collateral to make up for the risk, typically all company assets will be accepted as collateral, and some personal assets which also include your home. It’s not unusual to need collateral equivalent to 50% or more of the loan amount. You will also need your lease.

Going Beyond Unsecured Small Business Credit Cards: Private Investors and Alternative Lenders

Private investors and alternative lenders also offer credit lines. These are easier to get approval for than conventional SBA loans. They also necessitate much less documentation for approval. These alternative SBA credit lines often require good personal credit for approval.

Unlike with SBA, many of them don’t require good bank or business credit approval. Most of these kinds of programs call for two years’ of tax returns. Tax returns have to show a profit. Rates can vary from 7% or greater and loan amounts extend from $25,000 into the millions.

Loan amounts often have a basis in the revenues and/or profits reflected on the tax returns. In some cases lenders may want other financials such as a profit and loss statement, balance sheets, and income statements.

Going Beyond Unsecured Small Business Credit Cards: Merchant Cash Advances

Merchant cash advances have rapidly turned into the most popular way to get financing, in large part as a result of the easy qualification process. Companies with 10k in profits can get approval, with the business owner having scores as low as 500.

Some sources have now even started to offer credit lines that go with their loans. You will have to have at least $10,000 in revenue for approval. You need to be in business for at minimum one year, however three years is preferred. Lenders regularly want to see a credit score of 650 or better for approval.

Loan amounts are commonly about $20,000. Lenders generally will pull your business credit, so you should have some credit already established and in some cases lenders will want to see tax returns. Rates differ based upon risk for this program, and there usually are not a lot of funding sources who offer it.

Going Beyond Unsecured Small Business Credit Cards: Securities Financing

You can get financing regardless of personal credit if you have some form of stocks or bonds. You can also get approval if you have somebody wishing to use their stocks or bonds as collateral for financing.

Personal credit quality doesn’t matter as there are no consumer credit requirements for approval. You can get approval for as much as 90% of the value of your stocks or bonds. Rates are frequently below 2%, making this one of the lowest rate credit lines you’ll ever see. You can nevertheless earn interest as you generally do on your stocks and bonds.

Unsecured Small Business Credit Cards and Lines are Very Similar

Credit cards often offer 0% intro rates for up to two years. So they are very helpful for startups especially. Credit lines allow you to take out more cash at a more affordable rate than do cards. These are the main two differences which will affect you between credit cards and credit line.

Investopedia even says that, “lines of credit are potentially useful hybrids of credit cards.”

Both cards and lines are revolving credit. Credit lines are tougher to qualify for as card approvals are generally very quick, many times automated, while line require an in-depth underwriting review.

Lines usually offer lower rates, per Bankrate card rates average 13% while lines average 4%.

Unsecured Small Business Credit Cards

Many of them report to the consumer credit reporting agencies. They all require a personal guarantee from you. You can get approval typically for one card max as they stop approving you when you have two or more inquiries on your report.

Most credit card companies offer business credit cards including Capital One, Chase, and American Express. These have rates much like consumer rates and limits are also similar.

Some of them report to the consumer reporting agencies, some report to the business bureaus. Approval requirements resemble consumer credit card accounts.

Inquiries

Primarily, when you apply for a credit card you put an inquiry on your consumer report. When other lenders see these, they will not approve you for more credit due to the fact that they do not know how much other new credit you have recently obtain.

So they’ll only approve you if you have less than two inquiries on your report within the most recent six months. Anymore will get you refused.

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Check out our professional research and score the best business credit cards for your business.

Going Beyond Unsecured Small Business Credit Cards: Details

With unsecured business financing, you deal with a lender who focuses on securing business credit cards. This is a very rare, only a few know of program which few lending sources offer. They can usually get you three to five times the approvals that you can get on your own.

This is because they are familiar with the sources to apply for, the order to apply, and can time their applications so the card issuers won’t reject you for the other card inquiries. Individual approvals commonly range from $2,000 – 50,000.

Results

The end result of their services is that you often get up to five cards that resemble the credit limits of your highest limit accounts now. Multiple cards generate competition, and this means you can get your limits raised in most cases within 6 months or less of your original approval. Approvals can go up to $150,000 per entity for example, a corporation.

With UBF they actually get you three to five business credit cards which report solely to the business credit reporting agencies. This is significant, something most lenders don’t offer or advertise.

Not only will you get money, but you build your business credit as well. So, within three to four months, you can then use your newly established business credit to get even more money.

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Check out our professional research and score the best business credit cards for your business.

Rates

The lender can also get you low introductory rates, more often than not 0% for 6-18 months. You’ll then pay normal rates after that, typically 5-21% APR with 20-25% APR for cash advances. And they’ll also get you the very best cards for points.

So this means you get the best rewards. Much like with anything, there are HUGE benefits in teaming up with a source who concentrates on this area; the results will be better than if you try to go at it alone.

Qualifications for Unsecured Small Business Credit Cards

You have to have excellent personal credit right now, preferably 685 or higher scores, the same as with all business credit cards. You shouldn’t have any negative credit reported to get approval. And you must also have open revolving credit on your consumer reports right now. Plus you’ll have to have five inquiries or less in the most recent six months reported.

Fees

All lenders within this space charge a 9-15% success based fee and you only pay the fee off of what you secure. Remember, you get a number of additional perks and about three to five times more cash through this program than you can get on your own, which is why there’s a fee, the same as all other lending programs.

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Check out our professional research and score the best business credit cards for your business.

Guarantors for Unsecured Small Business Credit Cards are ALWAYS Welcome!

You can get approval making use of a guarantor and you can even use various guarantors to get even more money. There are likewise other cards you can get making use of this same program. But these cards only report to the consumer reporting agencies, not the business reporting agencies. They are consumer credit cards versus business credit cards.

They supply similar benefits including 0% intro APRs and five times the amount of approval of a single card but they’re much easier to qualify for. You can get approval with a 650 score and seven inquiries (or fewer) in the most recent six months.

Details

And you can have a bankruptcy on your credit and other negative items. These are a lot easier to get approval for than UBF business credit cards.

With all cards above, you should have good consumer credit in order to get approval but what happens if your personal credit isn’t good, and you don’t have a guarantor?

This is when building business credit makes a lot of sense even when you have good personal credit, establishing your business credit helps you get even more money, and without having a personal guarantee.

Get Unsecured Small Business Credit Cards and Leave Your Competition in the Dust

Company credit is credit in a company name, that’s associated with the business’s EIN number, and not the owner’s Social Security Number. When done correctly, you can get unsecured small business credit cards.

And you can get it with no personal credit check and no personal guarantee. So that’s a thing all other cards above just can’t deliver. You can get three types of company credit cards. The vendor credit offers net 30 terms used to start a business credit profile. With the retail credit tier, get credit cards with high limits at most retail stores.

Then with the cash and fleet credit tiers, get Visa, MasterCard, and American Express cards you can use anywhere. These may be acquired with no credit check or guarantee. Limits are oftentimes $5,000 – $10,000 to begin. And they can even exceed $50,000.

Your company can get credit cards and financing, if you know where to look. Check out how this will help your company get unsecured small business credit cards.

 

 

 

 

 

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