How to be Approved for a Business Working Capital Loan

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Your business is going to come to a point where it is going to need working capital to grow.  There are very few businesses out there that can grow their business organically without using any sort of outside capital.  In most cases these businesses grow at a much slower rate then a business that has capital behind it.  When in fact your business does get to the point where it needs working capital financing, the best scenario is to try and be approved for true unsecured financing without using a personal guarantee. 

There are three different business working capital loans you can potentially be approved for:

 - True unsecured business working capital loans

 - Secured business working capital loans

 - Business working capital loans without using a personal guarantee

The goal for any business owner is to be approved for working capital lending without having to use any sort of collateral or personal guarantee.  In the short term if the situation requires quick financing, a business can be approved for a working capital business loan using collateral such as inventory, commercial or residential property, future credit card receivables, etc.  Quick financing however, can leave your business in a dangerous situation in the future.

Quick short-term business financing solutions can leave your business and personal assets at risk

To make sure your business and personal life isn't threatened, the best way to be approved for working capital lending is to have a strong corporate foundation so you can apply for unsecured business financing without using a personal guarantee.  In order to be approved for this type of financing you will need to take your time, build corporate credit, and prove to financing organizations you are a low risk small business borrower. 

A strong business credit foundation is the only right way to be approved for unsecured business working capital financing

The first step in creating a strong corporate credit foundation for your business is to first understand what your business needs.  You may want a business working capital loan but do you need it?  Putting yourself into debt for no reason is definitely not the goal here.  The goal is to obtain unsecured business financing to grow your business.  A few questions you might want to ask yourself before you apply are:

 - Do I have enough money without working capital financing to operate and grow my business?

 - Am I in the position to where if a bank or lending institution asked me any question about my business, I could answer is correctly and with confidence?

 - Do I have a goal or plans for the business working capital loan that I will be applying for?

 - Do I have the relationships and partnerships setup to make sure that my business loan results in additional revenue right away?

Would I give me a loan? 

Small business owners fail to ask themselves these questions before they apply for financing and in many cases it leads them down a long drawn out road.  Be sure to perform all the research you can before applying for a certain business loan.  Ask a ton of questions and take good notes.

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