Ready to grow your business through a bank loan? The catch is if you don’t need it right away, the chance for approval is on your side. Here’s how I got a business line of credit and how to get yours.
My business bank accounts have been active for many years, and although I don’t recall all of the transactions, requesting a line of credit is one memory that stays with me.
I learned, through books available at the library (pre-Internet days), how important it is to establish a relationship with a bank representative within the first year of opening an account.
Arriving at the bank to deposit and withdraw money gave me the right opening to establish a relationship. Each time I entered the same branch, I made eye contact with the representative who opened the account. We exchanged greetings when he wasn’t with a customer. I inquired about his family, weekend plans, or golf game.
At times, I spoke with him in his office for updates on account offerings and interest rates. This information wasn’t always of major importance, but I believed the interaction was beneficial so I wasn’t just another account holder.
I questioned the bank representative about a line of credit just under a year of my account opening. My deposits and withdrawals were steady as was my appearance at the branch. Sales weren’t yet increasing, but remember that I hadn’t been operating long. It made sense to me, as part of general research, to ask about borrowing options.
The representative was eager to let me know what was available, and at the time there was only one option. The credit line was offered at an interest rate that fluctuated with the prime rate, and I could secure the credit for more than $10,000.
Best of all, if I applied and was approved (he saw no reason why I would not be approved), the line of credit would not cost an annual fee. The only fee imposed would be on the cash I borrowed.
Of course I was asked why I needed the money, to which I responded that buying new business equipment was part of next year’s planning, and I wanted to be ready for those purchases if additional funds were available.
I didn’t have an immediate need to borrow the bank’s money, but if I could apply and be approved, why not submit an application?
Soon after the submission, I received approval by mail along with checks preprinted with my name, the business’s name, and the words “Business Line of Credit” shown at the top of each check. Today, I still have access to the credit line and use it responsibly.
Ready to proceed?
There are lots of articles online about applying for a business line of credit. Unfortunately, the articles I read weren’t forthcoming about the tactics or results.
I realize that banking has changed since my line of credit application was approved, but I do believe that the steps I took are important to achieving a good result. Also, remember that you are a financial genius, as proven through this article, so let’s proceed with this goal.
If you do the following, and are patient, you may also get your credit line so it’s ready for growth opportunities and emergency funding.
1. Keep a clean bank account.
If you are one who bounces checks or doesn’t cover costs in your account, you will not be approved for anything, not even to take the free lollipops in the bowl on the bank’s welcome table. I believe you know this already, but I have to state it.
Customers in good standing and with an average credit rating get approvals. If you’re not in this pool, set a goal to get there.
2. Visit your convenient bank branch.
It’s comforting today that you can bank online. However, scanning checks and transferring money through an app won’t endear you with the people you need to know in order to get what you want.
Make an appearance. Let people see your face. Spare 90 seconds for conversation with a representative about the day, the weather, or simply nod your head and wish the person a good weekend.
Two more steps
3. Learn about account offerings.
The representative is there to provide you with information on financial options. Let her do her job. It’s okay to decline a new credit card or other pitch.
Also, be ready to ask questions about establishing a line of credit. It’s not that you’ll apply (unless the offer is a good deal); it’s that you need details about the process.
4. Prepare for the best outcome.
You already know the importance of installing business backups. If your computer fails, you want to restore intellectual property into a new computer through a cloud backup or internal backup system. The same is true for the credit line. It’s wonderful to have access to it before it’s needed. This is why you research the process and learn your options before applying.
More than one way to get credit
My hope is that my personal experience and the above steps lead you to approval for a business line of credit. Today’s financial processes may not be as smooth, or maybe it is. Do not let your mind talk you out of approaching a representative simply to ask questions. You are not committing to anything except education through facts and knowledge.
If one bank seems too difficult to get the credit line, perhaps another bank’s process is easier. Leave your comfort zone behind and investigate the options so your business flourishes in the wonderful way you visualize.
One of my popular speaking topics uncovers how new entrepreneurs finance their businesses. Contact me to share these insights with your audience.
What are your questions on applying for this vital part of business growth?