The fact of the matter is lending is down. The reasons behind that fact prove far more interesting. Yes, it has to do with the state of the current economy, but only partially. The bigger road block to professional financing are the professionals themselves. This is a topic business owners don’t like to talk about. That being said, this article will broach the uncomfortable subject of how past mistakes affect future lending potential.

The Greener You are the Harder You Fall

You’ve secured the backing to open your doors, your business is creating buzz, and those revenue-gaining activities (RGA’s) can’t be far behind. All in all, the future looks bright. That is until it’s time to take things to the next level.

Just as your business is taking off and you’re ready to transition from a startup to an established company, or move from a small structure to a medium sized one, what should come back to haunt you, but those rookie mistakes. Advance Funds Network (AFN) has seen this kind of thing before.

Short-sightedness and improper spending practices can lead even the most well-intentioned businesses down an unhealthy financial path. Unsecured lines of credit are one way out, but you have to make sure that they are the right option for you. Don’t just take money and run with it. That mentality will stop you from growing your business when you need the capital most.

AFN would like to discuss 3 things you should think about before you borrow money. It’s a segment we call:

Stop, Think, Then Borrow

Step One: Avoid Traditional Assumptions. Many borrowers think that a loan approval from a traditional bank always comes with collateral strings attached. The truth is that depends. If you have good credit and proof of investment right out of the gate, you may be able to negotiate on the loan’s finer points. This may include collateral. However, in today's lending market, it is usually not the case. Talk to the bank before you spend more than you need to in order to secure funding.

Step Two: Stay “bankable” both personally and professionally. One of the biggest mistakes all businesses make is relying on professional credit more than personal. They borrow under the assumption that what they do personally won’t affect them professionally. Some businesses even use personal funds for business expenses. Stay out of this credit briar patch completely. Realize that both credit scores matter. Do everything you can to maintain good credit no matter what.

Step Three: Choose the right lending option. There are a lot of lenders out there with a lot of offers. However, not every offer is right for every company. Unsecured lines of credit are a great example. Many businesses sign on with thoughts of reusable capital, but give no thought to their cash flow or RGA’s. Before long they’ve committed to an ill-fitting solution that hinders their growth potential.  A line of credit offers flexibility & accessibility that are most beneficial for business owners.

Contact AFN to review the unsecured lines of credit before you sign up. Visit: www.advancefundsnetwork.com for help.