Establishing a business line of credit

[David Lewis]

I’m working on getting a business line of credit. In my quest to do so, I’ve had numerous companies say they can get me multiple lines of credit but charge a fee to do so. They claim they know the “right” companies to work with to get me approved.

I feel like this is something I can do on my own, but want to make sure I’m not missing anything. Looking for guidance as I grow my business. Thank you!!

[Mitch Messer]

Hi @David Lewis. Getting business LOCs isn't hard; getting good ones is! We've been direct-marketed to by "business lenders" for well over a decade, but when you look at the fine print, it's always at finance terms that would make a New York mobster blush!

Before I paid some third-party, I would instead pay a visit to the local branch of my business bank (where I have my business checking account), introduce myself to the branch manager, and explain what I do and how I serve my clients. I'd specifically ask what options the bank might have to extend business credit to an enterprise such as mine.

I did exactly this back in the early 2000s with First Union Bank (now part of Wells Fargo) and secured a mid-five-figure business LOC. No third-party fees paid. No finance terms that involved first-born children or broken knee-caps, either!