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How It Works?
What Is a Business Line of Credit?
Your Business Line of Credit Options?
What Are the Benefits of a Business Line of Credit?
How a Business Line of Credit Works?
How to Qualify for a Business Line of Credit?
How Do You Apply for a Business Line of Credit?
The Biggest Advantage of a Business Line of Credit
What’s the Difference With a Credit Card?
Is a Line of Credit a Good Fit for My Business?
We help you save time and money by easily finding the best loan options
See all your loan options in one place with our quick, simple application. It takes 1 minutes to complete and won’t impact your credit score.
Finding the best loan option for your business should be easy. With us, you can get approved within hours so you can get back to running your business.
The best loan option is one based on your budget, goals, and unique needs. We help you compare all your loan options in one place, from the industry’s top lenders.
Once approved, your funds are transferred directly into your business’s bank account within 24 hours. Growing your business is just that simple.
A business line of credit works similar to a credit card albeit for businesses. As part of this product, businesses are provided with access to a certain sum of funds. The business can use whatever funds necessary and interest is paid only on the part of the fund that was borrowed and utilized. For businesses where capital needs are not steady, a business line of credit can be the perfect solution.
A merchant cash advance (MCA) is a lump sum of capital lent against a business’s future sales.
6 months—3 years
Starting at 7%
As fast as 1 day
When your business needs additional capital, securing a small business loan can be the best decision you make for your company.
Each business, no matter their size, experiences periods where working capital is tight. A small business loan can help shorten these stretches, without interrupting operations.
Securing a small business loan allows you to maintain control of your company. You can use your loan however you like and can keep any profits or gains your business generates, all without seeking permission from your lender.
In order to grow, you have to continually invest in your business. A small business loan can enable you to plan for the future without using any working capital from your day-to-day needs.
Trying to capitalize on a new market? With a small business loan, you can secure the location you need to widen your business’s reach. The more locations you have, the greater your chance to grow.
A business line of credit is different from a business loan in how the fund is made available and repayment terms. A business loan provides businesses with one-time lump sum amounts that can be utilized as needed and have to be repaid based on pre-decided terms.
A business line of credit, on the other hand, allows businesses to utilize from a line of credit and businesses can use and repay the amount as many times as they want similar to a credit card. Most lenders allow early repayment on the balance amount which can save on interest fees considerably. Typically a line of credit can range from $1,000 to $250,000. The smaller lines of credit usually do not require collaterals hence no need for businesses to provide inventory, controlling interest or real estate as collaterals.
The qualification criteria can vary greatly based on the size of the line of credit and the lender. Banks or financial institutions may require the business to be at least a few years old and have a sizeable revenue before allowing a business line of credit. They may also require significant collaterals which are foreclosed if the business defaults on repayments.
Business and personal tax records, profit and loss report of the business, balance sheet, bank account details, account statements and credit history are usually considered as part of the qualification process. Online lenders will have a much simpler qualification process but the repayment interest tends to be higher for these lenders. In order to secure a business line of credit, your business should at the least be 6 months old and generate yearly revenue of $25,000 or higher. Depending on the lender you approach, you might want to have a credit score of 500 or higher.
The complexity of the application process varies based on the size of the credit line and the lender. If you have approached a bank or a traditional lender, they usually deal with much larger lines of credit. To apply for a large line of credit you have to fill up lengthy application processes involving much paperwork and might take a considerable amount of time.
Online lenders deal with shorter-term and smaller lines of credit. Hence the application processes are usually very simple and fast. It is easy to complete the application and provide the requisite paperwork.
A business line of credit is often preferred over other small business loans due to the flexibility of use and many salient factors. Unlike other loans, the business need not apply for the loan again and again. Once the credit line is approved, they can draw amount, repay and draw again. This simplicity of use makes it perfect to restock inventory, handle payroll, make investments, capitalize on new opportunities, handle an unforeseen crisis, pay due to invoices and so on. As the business only pays interest on the amount drawn, they are not stuck with a flat repayment amount each day or month. The ability to repay the drawn amount early can save on interest costs considerably.
For businesses with larger lines of credit, they might have enough cash available to expand their business to a new location, make expensive equipment purchases or renovate their business as needed taking advantage of the flexibility of a business line of credit.
While very similar, credit cards and business lines of credit have some key differences which make one more desirable over the other.
· Credit cards, in general, have higher interest rates as compared to a business line of credit.
· Credit cards charge interest fees for balance transfers and cash advances. The interest rates for cash advances can be very high.
· A business line of credit makes cash available as compared to card-based payments only.
· Credit card repayments are done monthly but a business line of credit usually provides more flexibility in repayment.
Keeping a large pool of working capital can be tough at times for businesses, especially smaller and new businesses. A business line of credit is the perfect choice under those circumstances as they allow businesses to cover any gaps in cash flow, make short-term purchases, keep the business operational, stabilize cash fluctuations, cover payroll gaps if any, stock inventory and handle any big orders that might have come up.
When compared with many other small business loan products, cash advances and other modes of the accruing fund, the business line of credit stands apart due to the simplicity, flexibility, return on investment and instant access to cash whenever required. If your business is a seasonal business that struggles to stay operational during the offseason, if you are not prepared for a crisis such as an expensive equipment breakdown or if you are anticipating a large order that could stretch your working capital, a business line of credit is for you. You can draw on the provided funds at any time you want, pay interest on only the amount drawn and keep the cash revolving.
Since your fund utilization and repayment under a business line of credit are reported to credit bureaus, you can continue utilizing the line while building your credit history. Once you have a solid credit history, other options for amassing funds open up for you. So check if you qualify for a line of credit and apply now. It can take care of many of your business’s daily woes.
Fill the online application form provided and voilà! We will get in touch with you immediately and provide you with a number of options customized for your business, depending on the information you’ll have given us. Decide on what best suits your business and remember that you are not obliged to proceed further, and no charges apply whatsoever.