Full doc business line of credit

Full doc business lines of credit are credit that is often extended to a business or individual that is considered to be a higher credit risk.Full doc is known as full documentation meaning that the business will have to provide complete written information to verify income, cash flow and credit worthiness. In addition you will typically need to have considerable collateral to back your line of credit as well.

As difficult as these lines of credit can be to get it is crucial for businesses of any size to be able to access credit to maintain and grow their business.These lines of credit will allow businesses to purchase the goods or services they need to manufacture or sell their own products or services.Without access to credit few businesses can survive in a fast-paced and technology driven world that literally depends on credit.Most business lines of credit do not offer a fixed rate of interest.

But business owners (especially small business owners) may be wondering if they can even access this type of credit.The answer is yes-even in a tightening market.While lender are much more reluctant to extend credit to higher risks with the proper documentation and a credit score of at least 640 you can most likely access a line credit. Most lenders will want at least a minimum credit score of 680 for No Doc (no documentation) and 640 for Full Doc (documenting personal and business income and assets). Ideally most lenders will be looking for a 700+ credit score.Obviously the higher your credit score the more options for business lines of credit will be available to you.

It is important to understand that there are dual sides to a full doc business line of credit. These lines of credit exist to help those businesses that may be a higher credit risk but also for businesses that have a strong credit history and are willing to give full disclosure to their lender. The businesses that fall into this category can find themselves with access to a much higher line of credit. Businesses that have strong financials and credit and that are willing to provide full documentation (document income and assets, business and personal) can find that business lines of credit in excess of $1,000,000 can be available.

Most businesses will qualify for between $25,000 to $500,000 (or even more), depending on the strength of the business credit application, credit scores, time in business, business type, length and depth of credit history, documentation provided, money in the bank, and a number of other factors. Also, small business owners should keep in mind, the maximum amount that will be available to you will be dependent upon the strength of your credit file. Stronger files may even qualify for more, potentially up to $500,000 (subject to business location). But it is important to remember that credit files that are lower in the credit-qualifying spectrum may qualify for only a fraction of that amount or for no line amount at all.

Start-up business may find that their lender requires them to apply for a full doc business line of credit.This is due to not having a long business history.Your lender will need to determine if your business is viable enough to be granted a line of credit.While this can be difficult it can be done.

Business owners of every size should also keep in mind that many lenders will require a clear and concise business plan in addition to any other documentation.If you do not have a written business plan then now is the time to sit down and write one.A well-written business plan will give confidence to your lender that you have a plan in place and let them know what you will be doing with the credit you are asking for.