Business owners can obtain Unsecured Lines of Credit to finance their business expansions and operations if they have a credit score of 680 or higher and have been in business for at least two years. In the past, home equity lines of credit were frequently used for these business purposes but most banks recently froze lines of credit based on real estate equity. Business owners can be approved for Unsecured Business Lines of Credit up to $350,000 with no documentation and as much as $1 million with full documentation applications. An advantage of a line of credit versus a loan is that interest is paid only on the outstanding balance of an unsecured line of credit.

Unsecured Lines of Credit can be obtained in roughly 4 to 6 weeks but should never be applied for directly by the borrowers themselves. The borrower, although qualified, cannot simply walk into a lending institution or bank for an unsecured line of credit and automatically be approved. Companies that specialize in unsecured lines of credit are available and should be contacted to assist with the substantial preparation that is necessary. Professional business finance consulting firms maintain contacts and affiliations with lending institutions that offer unsecured lines of credit. It is extremely important that the business owner work with one of these firms instead of approaching the bank directly. The application process is somewhat complicated and documentation must be properly formatted and compiled to avoid unnecessary rejections.

Business owners can no longer rely on the equity in their real estate holdings to finance their business expansions and growth. Despite the fact that they paid high fees for the availability of home equity lines of credit, even business owners with excellent credit scores and excess equity in their properties are finding it impossible to access their credit lines. The main reason is that banks have virtually stopped providing homeowners access to the equity in their properties as lines of credit. Declining real estate values have made it necessary for most major lenders to cutback and freeze Home Equity Lines of Credit. IndyMac, Washington Mutual and other major mortgage lenders have made decisions to rescind these credit lines, according to the terms of their contracts with borrowers.

These recent eliminations of access to funds for their businesses have hit business owners especially hard. Many of them have used home equity lines for working capital during slow periods or as sources for cash during periods of expansion. The net result is that expected funds for business uses are not available, although they are still very necessary. The lack of time to make other arrangements because of this sudden policy change can severely impact a business owner's ability to survive a shortage of funds. Many business owners routinely paid back their lines of credit so that those funds are available for them to use at some pre-determined time in the future. That option is no longer available, leaving them without their usual funds.

In summary, Unsecured Business Lines of Credit are methods of financing that are still available to qualified borrowers who are also business owners. Firms that specialize in acquiring unsecured lines of credit should always be involved in this application process. The applicant will need assistance in properly preparing and organizing his documentation for submission to lenders. A firm that specializes in this type of financing will be able to present the borrower as the "perfect applicant" because its business is to assure that all aspects of the application adhere to the current credit, submission and underwriting guidelines of each individual bank. This very important initial step in the process will greatly enhance the business owner's potential to be successfully approved for an unsecured line of credit.