Vital Three (3) Step Method

Here are the 3 steps you need to take to get the funding that you need. If you followed our last post we talked about the importance of making a connection with a bank employee, we also talked about the importance of opening your business account and developing a relationship. Now we will talk about the 3 steps to getting your credit line established!

  • Inquire: Since you and your contact have established a growing relationship, now is an opportune time to inquire about the bank’s business line of credit program. Say that you are researching a line of credit in the range of $25,000 – $50,000. Your contact should tell you that they have a simple application for such a program. Ask about qualifying criteria and the documentation you’ll need to provide, but do not seem desperate when you inquire. And do not apply—WAIT!
  • WAIT: If possible, it’s in your best interest to wait two or three months before submitting the application. Waiting for such a length of time will allow you to establish account usage and payment history. Be sure to stay in touch with your new contact at the bank so that you can maintain your relationship with them. Considering the current state of the lending industry, many lending institutions will only lend to existing clients who have established relationships with them.
  • APPLY: At the appropriate time, let your contact know you would like to apply for the line of credit you inquired about. Convince them that you are a good candidate for this financing by asking such questions as “based on our discussions, how much do you think I can be approved for?” It is important to have the contact fight for you to be approved, and you should only apply if you contact has committed to working with you for this purpose. You want them to be invested in your cause.

If you are declined:

If you are turned down, you can push back yourself on the contact because they are the ones who communicated to you that they thought you would be approved. Ask them to do more on your behalf. Don’t give up on your bank. Ask them for a counter offer and ask what else you need to do to be approved.

If you are approved:

If you are approved, but it’s not for the amount you are seeking, you can ask them to push back here as well. Once you have received your line of credit, you need to use it regularly. If you don’t, the line may be closed or reduced. You always need to pay on time and even early if possible. Once you’ve utilized your line of credit for a few months, you can always request an increase and should do this quarterly.