If you can’t get a credit line for the total amount you want upfront, here’s a useful strategy to prove your credit worthiness.
Apply for a credit line when you don’t need it.
It sounds crazy, but it often works. Use a small portion of the credit line to support something worthy in your business (no shuffling off to Brazil with the money.) Pay it back early to build your credit score.
Then ask for a credit line increase six months or a year later. We’ve done this for several of my companies over the years and it’s proven to work well. But you have to plan ahead to make this work and you have to be diligent about making payments. There’s no question, the restrictions are much tougher now, but they’re not impossible. Let our laundromat owner inspire you.
The best bet for small business funding is to do business with a financial institution that has maintained healthy lending practices. The odds are good they’re financially strong and able to accept some calculated risks.
Make sure you keep your pulse on what’s happening with your lender. They can start out financially strong and end up weak after making some poor management decisions. If they’re struggling financially, they will find a way to make you pay for it. (The end of our New York City cynicism.)
Contact us and let us know what you discover. We wish you happy funding!
In Your Corner
Dawn Fotopulos
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