Obtaining unsecured business loans requires a few prequalifications for a client to qualify, in this article we will be discussing exactly what you may need to do to obtain this type of loan. Most of unsecured business loans have a maximum loan amount of $150,000 but some lenders will go as high as $250,000 if certain criteria are met. Financing terms vary and are generally 2 to 10 years payback periods.
The application process in obtaining a unsecured business loan is generally not all that painful as compared to a SBA loan, which require a lot of documentation and take a long time to get approved. Usually applications are 1 to 2 pages and most of the data is then pulled off of your credit report.
First, the most important factor in obtaining an unsecured business loan is your credit score. You will generally need a minimum score of at least 700 to qualify. You must check all three credit reporting agencies to obtain this information, which are Trans Union, Experian and Equifax. Once you completed this step be sure that your score is above 700 on all bureaus reports, if not you may want to contact a credit repair agency to help before applying for a loan.
When looking for a loan, try to keep your credit inquiries to a minimum as possible. If a lender sees that you are attempting to obtain a loan from multiple sources it can prevent you from getting a loan. So be sure to do a personal credit check yourself, it will not affect your score or be held against you.
Another important factor is established credit history. You will need a minimum of three active accounts that you pay regularly on to show that you pay your bills on time. Good loans to have on your credit account are home mortgage and revolving credit accounts.
A deal killer in obtaining an unsecured business loan is if you have had a bankruptcy in the last 5 to 10 years. Most lenders will not even look at your business loan idea if you have a bankruptcy in your recent past. Your only option then would be a high interest cash advance or possibly taking out a second mortgage on your personal or business property.
Another very important factor is your personal or business income. In order to qualify for a loan you must have the funds available to make the payments back to the lender. You also must have a low debt ratio to your income, high debt will generally result in a decline from a lender.
In conclusion there are many factors to consider when applying for a commercial loan, you must be sure to have all your ducks in a row before you start the application process to help ensure that you will get approved for that loan.
The application process in obtaining a unsecured business loan is generally not all that painful as compared to a SBA loan, which require a lot of documentation and take a long time to get approved. Usually applications are 1 to 2 pages and most of the data is then pulled off of your credit report.
First, the most important factor in obtaining an unsecured business loan is your credit score. You will generally need a minimum score of at least 700 to qualify. You must check all three credit reporting agencies to obtain this information, which are Trans Union, Experian and Equifax. Once you completed this step be sure that your score is above 700 on all bureaus reports, if not you may want to contact a credit repair agency to help before applying for a loan.
When looking for a loan, try to keep your credit inquiries to a minimum as possible. If a lender sees that you are attempting to obtain a loan from multiple sources it can prevent you from getting a loan. So be sure to do a personal credit check yourself, it will not affect your score or be held against you.
Another important factor is established credit history. You will need a minimum of three active accounts that you pay regularly on to show that you pay your bills on time. Good loans to have on your credit account are home mortgage and revolving credit accounts.
A deal killer in obtaining an unsecured business loan is if you have had a bankruptcy in the last 5 to 10 years. Most lenders will not even look at your business loan idea if you have a bankruptcy in your recent past. Your only option then would be a high interest cash advance or possibly taking out a second mortgage on your personal or business property.
Another very important factor is your personal or business income. In order to qualify for a loan you must have the funds available to make the payments back to the lender. You also must have a low debt ratio to your income, high debt will generally result in a decline from a lender.
In conclusion there are many factors to consider when applying for a commercial loan, you must be sure to have all your ducks in a row before you start the application process to help ensure that you will get approved for that loan.
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