By the time your small business really needs an unsecured business line of credit, it may already be too late for you to establish the kind of positive credit history that you need to get approved. The truth is, approval for an unsecured business line of credit requires that you have established significant credit history well prior to application, so it’s important that you build positive credit history before you even apply. Here are some of the steps you should follow prior to applying for unsecured business line of credit.


Get Your Business Registered

Step one in the process is to make sure that you register your company with the business credit agencies. This won’t cost you anything, and it gets your company known to the major credit bureaus which will be consulted by lenders in the future.


Maintain Positive Bank Accounts

Make sure your checking and savings accounts at the local bank always have positive balances, with no negative transactions like ‘insufficient funds’. Ideally, you should also develop cordial relations with the business manager at your local bank, since he/she may be helpful to your business in the future.


Prepare a Solid Business Plan

Having a solid business plan is essential when applying for an unsecured business line of credit, because it will show what your business is all about, and why you’re seeking a line of credit in the first place. This is a great way to show a lender that you have a professional attitude and are serious about business finances.


Establish Good Credit with Business Partners

Make sure that you keep all your credit payments up to date and are not assessed late charges for payments made beyond deadlines. It’s especially important that you pay all your vendors and suppliers on time, in accordance with whatever kind of payment schedules you have arranged with them. Keep in mind that many vendors report late payments to the business credit bureaus, so your late payments may not go unnoticed.