How do you develop the best business environment using unsecured funds? You build a framework for sustainability using 5 tools that are crucial in any trade; research, credit, planning, management, and revenue generation. We will take a closer look at each element and how it can help you reach profitable stability.

The Question of Credit
Part of the attraction to unsecured loans comes from avoiding a credit check. However, this is where the benefit of a little research makes all the difference.

The truth about the credit check is, it depends. There are several different types of unsecured business loans. Qualifying for funding can depend on how long you’ve been in business, your sales, records, your history with lenders, and yes, your professional or personal credit score where applicable.

If your overall goal is sustainability, focus on good lending practices.

• Credit check or no credit check; keep your score at 660 or higher so qualification isn’t a gamble.
• Make sure your business has been established between 6 months and two years (depending on the lending requirements).
• Don’t have too many credit accounts.
• Make payments on time.
• Review your credit report quarterly and work to improve your rating.

Following these borrowing guidelines shows diligence and responsibility in business; qualities that matter to lenders. That way, during any hard or lean times, lending companies will see the benefits of working with you.

Management & Planning

In addition to maintaining a good credit score, to get the full benefit of unsecured business loans, a business needs to develop a well-organized business plan and demonstrate sound management skills.

This may be foreign territory for a lot of business owners, so a better way to think of business plan writing is an explanation of what your business is, how it works, and why it’s profitable. It’s recommended that start-up companies and businesses looking for a professional face lift, develop a business plan before applying for financing. It is a step of good faith that lenders can use to help you get funding.

The U.S. Small Business Administration provides assistance with business plans and management development.

When in Doubt; Send Angels

Research, planning, and management can lead you to a different type of unsecured business loan: an Angel Investor.

These investors are successful entrepreneurs that like to back promising small businesses. It may cost you a piece of business ownership and the loss of independent management decisions, but their support comes with significant funds and a wealth of professional knowledge.

What’s the catch? These collateral-free partners, silent or otherwise, can be difficult to find.  If you’re serious about it, roll up your sleeves and find their representation network. To start a local search, contact your banker, attorney, or accountant.
There are a lot of misconceptions about unsecured business loans. By using these tools you can build a stable framework based on wisdom and professional responsibility. This framework will keep you on solid footing no matter what your financial future holds.