This post first appeared on HelpMeBuildCredit.

Multiple banks offer a product called the Unsecured Business Loan / Line of Credit. That means that collateral is not needed to support the loan. What makes TD Bank’s unsecured business loan so popular? It’s because of their easy approval process, and very basic requirements. 

TD offers an easy application with simple questions about the business and personal financials. The approval is based on your personal credit score and credit report. They will NOT ask for any documentation to prove the information on the application. No tax returns are required, no bank statements, no financial statements, etc. nothing!

How much can I borrow?

TD lends 15% of the gross sales, (up until 2 months ago they gave 25% of the gross sales; however, since the after-effects of COVID-19, they went more conservative). Being that it’s unsecured and the risk is higher, TD Bank caps the amount they borrow at $100k. If you are able to provide one year’s worth of business tax returns to ‘prove’ the information on the application, they will lend up to $150K. Anything more than $150k will need to be secured with collateral and will require a full financial package. 

The loan requirements

The official score required by TD is above 680. However, it’s recommended to have a credit score of above 700 as in some cases TD may require a 700 plus score. Also, they do not like to see high utilization and too many inquiries. 

The corporation would need to be at least 2 years old (1 year with a tax return can also work).

The hiccup

One requirement they do have is that the personal report needs to have an existing, individual account with a $25K credit limit. It can be a credit card, car loan/lease, mortgage, personal/student loan, joint account, etc. It can be an open account or even a closed one. The reason for this is: TD Bank wants to see that a different bank / institution already extended to you and trusted you with a larger amount of credit and that TD is not the first one to do so.

If someone does not have the 25K limit to prove their creditworthiness, TD Bank will then lend up to $25K. Once they see you are a trusted credit user with a larger credit line, they will increase the credit line after around 6-12 months.

How to get the $25k tradeline on your credit report asap?

If you don’t have any tradeline on your credit report that is at least $25k or more, there are some strategies on how you can get a $25k limit on your credit report asap.

Reallocate/Combine credit limits

If you have existing credit limits at a single bank that totals $25k or more between multiple cards, then you may have the opportunity to combine the credit limits all into one card so that you have one tradeline with a $25k limit.

Just keep in mind that most banks don’t allow you to relocate limits from business cards to personal cards or from personal cards to business cards.

You can check out the rules for relocating credit limits for each bank here.

Swipe $25k on a charge card

If you have a charge card* such as the Amex Platinum, Amex Gold, or Amex Green, those cards do not have a preset credit limit*. But that doesn’t mean you can swipe as much as you want. At a certain point, your transactions will get declined. TD Bank will look at the highest balance you’ve had within the last 24 months as your credit limit. So if you have one of those cards, you can try to check online to see if you have the spending power to swipe $25k on your card. If you do have that spending power then you will now need to find a way to spend $25k on the card. If all this is possible then bingo, you just hit a $25k credit limit.

*No Preset Spending Limit means the spending limit is flexible. [In fact,] unlike a traditional [credit] card with a set limit, the amount you can spend adapts based on factors such as your purchase, payment, and credit history

Apply for a new credit card that will approve you for high credit limit

If you don’t have an existing credit limit of at least $25k or more, then you can try to get approved for a new card and hope to get approved for a credit limit of $25k or more. 

The Lowes Store card is a great card to apply for as they usually approve for high limits. Even if you get approved for a low limit you can call to the lending department at 877-379-8173 and ask your credit limit to be increased all the way up to $35,000. As long as you have good credit this should be approved easily (recently during COVID it became tougher to get the increases). They are also very good at reporting the updated credit limit to the credit bureaus. It usually just takes about 48 hours for the updated credit limit to show on your credit report.

You can  research real results from previous applicants and see which cards are currently approving the highest credit limits. Check out the data in our Credit Card Database.

Become a joint or co-applicant

Another strategy that might work would be getting added as a joint or co-applicant to an existing card that already has a $25k limit. TD Bank will not count authorized users as a valid tradeline but they do count joints or co-applicants. Most banks do not offer joints or co-applicants for their credit card products. There are only two banks that have this option, Bank of America and US Bank. In order to use this strategy, you will need to find someone that has a $25k credit limit on either a Bank of America or US Bank credit card and is willing to add you as a joint on the card. 

Update: Starting in May 2021, you will be able to add co- applicants (joints) to Apple Card as well.

You can read more about joint and co-applicant credit cards here.

Get a secured card with a $25k limit

A secured credit card is a credit card that requires you to deposit funds to be locked up and saved by the bank just in case you fail to make payments. The amount you deposit will be the amount you get approved for as a credit limit. Most banks have a limit of up to how much they will allow you to deposit to get approved for as a credit limit. With most banks, you cannot get approved for a $25k credit limit, but I found one secured credit card that offers a $25k credit limit as long as you’re ready to give them a $25k deposit. It’s called the First Tech Platinum Secured Card. Check out the details here. If you have the spare $25,000 to deposit as a security deposit then getting this secured card can be an easy and effective way to have a $25k credit limit show up on your credit report.

Get a personal loan or line of credit with a 25k limit

Personal loans can be a great way to get approved for a $25k tradeline. The issue is that personal loans usually come along with high-interest rates and an origination fee that can reach higher than $500. But if you decide to go down this route I would recommend you to choose a bank that does not have an early payoff fee. Then pay off the loan as soon as the loan shows up on your credit report. As soon as you pay off the loan, you will no longer need to pay interest. Just please note it can take up to 60 days or so till the loan is shown on the credit report. 

You can check out these personal loan options:

• SoFi Personal Loans
• HSBC Personal Loans
• SunTrust Personal Line of Credit
• Td Bank Personal Line Of credit

Credit: Sara Weisz (the senior credit analyst and chief loan officer at Equire Inc), HelpMeBuildCredit.
Feel free to reach out Equire to learn more about your business loan options.

Taking out a business loan or line of credit, does it matter? Find out here.