How to Get a Business Line of Credit

Businesses need access to capital to keep their operations running smoothly. If you are in need of capital to maintain or expand your business, you may consider getting a line of credit in order to get the cash flow you need to run your business successfully. Additionally, establishing a line of credit for your business will help boost your business credit profile.

1. Gather all of your personal and business financial documents. You will need these documents when you apply for a business line of credit. These documents include personal and business tax returns, profit and loss statements and proof of your company's annual income.


2. Create a comprehensive business plan that describes your business and presents your company's financial history. Include any businesses that have extended credit to you, such as business cell phone services, credit cards that are in your business name and vendors you pay on a 30-day or 60-day cycle. Also state your goals and what you will use the loan for. 


3. Review your credit files at the credit bureaus. Contact all major credit reporting agencies to check your credit reports. Make sure you check both your business and personal reports for errors. If you see any errors or inaccurate entries, resolve them before requesting a business line of credit.


4. Approach the bank where you have business checking account. This is the first place you should apply for a business line of credit. The three factors that will help improve the creditworthiness of your company include positive cash flow record, history of regular deposits and consistent balances.


5. Apply to other local banks and other financial institutions that provide business credit lines. These include American Express and UPS Capital. Don't submit applications to many places within a short period of time since this can have a negative impact on your record. Wait to get a response before approaching the next institution.


6. Consult your local Small Business Administration office about obtaining a small business line of credit through the SBA 7(a) loan program. The Small Business Administration does not issue these loans but they provide lending institutions a guarantee on up to 75 percent of the credit line value, making it more likely that you will obtain a credit line.