If ever a business needs help to fund a growth stage, it will be at the beginning when it’s a startup. You may wonder whether you’ll be able to qualify if you’re in this position, as you may feel that an established business should find it easier to persuade lenders. However, it doesn’t have to be impossible if you approach it correctly.
Since new businesses will not have a successful track record of paying vendor debt or other loans, the business owner(s) will need to rely on their personal credit in this case, personally guaranteeing the line of credit. If you have a good track record of paying your personal debts on time and do not have any adverse markers in your credit history, these factors may outweigh the lack of any business history. In some cases a lender might require collateral as security in order for you to qualify - this would be a secured line of credit. However, in this case if you are able to show 6 - 12 months of good payment history on your line of credit, then the lender might allow you to convert your line of credit into an unsecured version, where the collateral requirement is removed.
