How to Receive Business Lines of Credit

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Receive business lines of credit by contacting local suppliers, visiting the local bank, researching the cost of a line of credit and applying for the loan. Prepare to back up a business loan with personal collateral using information from a financial consultant in this free video on business financing.

Part of the Video Series: Business Financing
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Video Transcript

My name is Bill Rae. I'm with Alumni Financial. I've been in the finance and the business world for well over 20 years, and today, the question is how to obtain business lines of credit. Okay. Good question. If you've been in business for a while, and you've been doing fairly well and are profitable, the very first place that I would look for a business line of credit would be to the people that I'm buying supplies from my business for. For instance, if I were a carpenter building houses, perhaps the first place I would look is to the lumber yard that supplies me the lumber to build that house. Those type of suppliers is what I'm referring to. Once you've done that and they offer you lines of credit and their terms and everything, then you can go to your local bank. Obviously, if you're in business, you have a banking relationship somewhere. Talk to your banker. See if they have a business line of credit. Ask them what it takes to apply. What type of terms are they offering? What is the cost to borrow money from that location? As in all things, weigh all your options carefully. Do understand what the costs are when you're borrowing money, whether it be from your supplier or from a bank. Once you have determined this, then simply apply. As long as your business is profitable and you have some assets that you can actually use to secure this line of credit, it shouldn't be as difficult as you think. However, do make sure that you understand the cost of that line of credit. Use it sparingly. Like anything else, they might ask for your personal assurance. Be willing to do so for a short period of time until your business can stand on its own. Once you've established lines of credit, make sure that you're prompt in repaying them. My name is Bill Rae, I'm with Alumni Financial, and we're helping you build wealth.


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