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Business Line of Credit Hub

We have the best rates on Business Lines of Credit. 

Find answers to your questions when applying for a Business Line of Credit.

Business Line Of Credit: What is it?

A business line of credit is a form of ‘revolving’ capital available to businesses who need access to cash. The concept is similar to that of a credit card, except a business line of credit provides borrowers with cash and often has a lower APR.

How Do You Qualify?

General qualifications include having at least $50,000 in annual revenue and must be operating for at least 6 months. Other information can be considered in your application.

Where Do I Apply?

Banks offer business lines of credit to qualifying applicants, but if you don’t meet requirements, consider applying through an online lender. BluVine and Kabbage are two examples of online lenders that lend capital to businesses at short notice.

A Brief Overview

Many companies use a business line of credit to satisfy a range of financial needs. The loan gives you access to capital which can help pay up-front costs, alleviate cash flow gaps, service debt, and react to emergencies efficiently. In addition, business lines of credit help individuals take advantage of opportunities at short notice.

Loan Amount Range

From $10,000 to more than $1 Million 

Term Duration

From 6 months to 5 years 

Interest

From 7% to 25%

Processing Time

24 hours

What are your options?

IDEAL FOR

Small loan amounts

New businesses

HOW TO QUALIFY

600 Credit Score

6 months of operation

$60,000 annual revenue

 

AMOUNT AND APR

At most $100,000

16-62% APR

 

IDEAL FOR

Instant cash

Low Credit Score

HOW TO QUALIFY

No Credit Score Requirement

12 months of operation

$50,000 annual revenue

 

AMOUNT AND APR

At least $2,000

At most $100,000

24-99% APR

 

IDEAL FOR

Good Credit Score

Established Businesses

HOW TO QUALIFY

600 Credit Score

24 months of operation

$75,000 annual revenue

 

AMOUNT AND APR

At least $5,000

At most $300,000

8-35% APR

 

IDEAL FOR

Instant Cash

High Revenue Businesses

HOW TO QUALIFY

600 Credit Score

12 months of operation

$100,000 annual revenue

 

AMOUNT AND APR

At most $100,000

14-40% APR

 

IDEAL FOR

Small loan amounts

Working capital

HOW TO QUALIFY

600 Credit Score

12 months of operation

$25,000 annual revenue

 

AMOUNT AND APR

At least $5,000

At most $100,000

9-40% APR

 

Does your business qualify for a ‘Business Line of Credit’?

What types of businesses qualify for this unique financing?

Businesses with access to revolving credit are typically established for more than six months. Younger businesses may not have enough financial history to receive access to short-term lines of credit. 

The amount of funding accessible to your business, along with the repayment terms, depends on a variety of factors including your credit rating, revenue stream, longevity, and other financial variables.

Based on past customers who received approval, they had the following:

Annual Revenue

More than $180,000

Credit Score

At least 630

Years of Business

More than 12 months

Pros and Cons

N

Have access to capital

N

Interest is only applied to the funds drawn

N

Flexible for any business

N

Bad credit is not an issue

N

Helps build credit score

M

Documents need to be provided every draw

M

Some require collateral

M

Low credit scores pay higher interest rates

Overview of Loan Types

Business Line of Credit

Speed

24 hours

Interest

7-25%

SBA Loan

Speed

3 weeks

Interest

At least 6.5%

Term Loan

Speed

2 days

Interest

7-30%

Equipment Financing

Speed

2 days

Interest

8-30%

Invoice Financing

Speed

24 hours

Interest

3% and %/week outstanding

Short-Term Loan

Speed

24 hours

Interest

At least 10%

Merchant Cash Advance

Speed

1 week

Interest

1.14-1.18%

Small Business Startup Loan

Speed

2 weeks

Interest

7.9-19.9%

Personal Loan for Business

Speed

24 hours

Interest

5.99-36%

Prepare these Documents for Your Application

E

Business Tax Returns

E

Personal Tax Returns

E

Credit Score

E

Bank Statements

E

Balance Sheet

E

Profit and Loss Statements

E

Driver's License

E

Voided Business Check

Understanding How Business Line of Credit Works

Business is unpredictable — plain and simple.

But businesses need to be prepared for emergencies — one mistake could permanently damage your finances if you’re not well prepared.

Flexible financing ensures that you are constantly prepared for the unexpected.

We’re going to have a look at the various advantages that a business line of credit may be able to offer your company. Make sure you’re always prepared.

Business Lines of Credit: A Different Type of Finance

Curious as to what a business line of credit is?

A business line of credit is exactly like a credit card, except it gives your business access to cash in the form of revolving credit.

A lender approves a certain amount of capital for you to access — this then becomes your available credit. 

What makes it different to a traditional business loan is that you don’t pay interest on the funds you don’t use; you only have to pay back the cash that you access. 

business line of credit

“Revolving Credit”: An Example

Securing a business lines of credit can come in various forms. Some companies back their lines of credit through collateral — such as business related assets — while other are simply backed by personal guarantees. 

“Revolving credit” is the type of credit we refer to when we talk about credit cards. This is because you can access it whenever you want and you’re only responsible for paying the balance of what you use — and once you repay your balance, you can re-access the same capital immediately. 

Here’s an example: your lender approves you for a $5000 business line of credit. You take out $3000 to pay off an overdue bill, leaving $2000 of available credit in your account. Once you pay the lender back the original $3000 you will have access to your full $5000 of credit. 

You don’t need to reapply for a new loan like you would with a traditional business loan. 

What’s Better: Traditional Loan or Business Line of Credit?

So, you may be asking yourself: should your business get a traditional business loan or a business line of credit?

There is no clear-cut answer, it depends on the structure of your business.

One advantage of a business line of credit is that it typically has a lower interest rate, although if you miss payments or are irresponsible with your line of credit, lenders will often raise your interest rates substantially.

Traditional business loans are also fixed rate, which means you know the total cost that you have to pay back regardless of interest rates changing over time.

Assess your business needs when you are considering what type of finance to access. Business lines of credit are great for flexibility, but if you have a specific budget or specific purchases in mind, you might prefer to apply for a traditional business loan. This isn’t to say that you can’t have both — many companies use traditional lines of credit for big purchases but keep a business line of credit for emergencies.

 

Types of Business Lines of Credit

Lenders do not tend to divide business lines of credit into different types. But for the purposes of this information we will divide them into short-term and long-term.

What is the reason behind this?

Business lines of credit are revolving and for this reason do not have specific term lengths — but we refer to them as short-term because you pay them back as quickly as possible to avoid accruing interest. Long-term loans are traditional business loans where you pay back a fixed amount over a fixed time-period.

The variations in these two loans mainly exist in the difference in interest rates, pay-back terms, and qualifications. 

business line of credit

Specific Benefits in Having a Business Line of Credit

The biggest advantage in having a business line of credit is the flexibility associated with it. You don’t have to pay interest on capital you don’t access, and once you pay back existing balances you have access to the same capital straight away. 

Business lines of credit help businesses maintain operating costs, alleviate shortages of cash, capitalize on opportunities, and stay prepared for the unexpected. 

In addition, there is no restriction on what you use the capital for: your business could use your line of credit on anything from payroll to property damages.

Flexibility is what distinguishes a business line of credit from any other financing option on the market. 

Credit Card or Business Line of Credit: The Differences?

People often compare these two types of financing because they are both forms of ‘revolving credit’, but there are many things that distinguish credit cards from business lines of credit:

  1. Business lines of credit often have lower interest rates
  2. Business lines of credit do not charge fees to access cash, like credit cards do for cash advances
  3. Payment terms are often different; credit cards usually prefer monthly minimum payments, business lines of credit are more flexible


What costs are associated with a business line of credit?

There are normally no upfront costs associated with a business line of credit. Unlike a traditional business loan, you only pay for the capital that you use.


Cash Flow Benefits Associated With a Business of Line of Credit

Business lines of credit are perfect for businesses that occasionally experience cash flow problems.

For example, if you often have clients who pay late but you have your own financial commitments to meet, business lines of credit can help you pay your bills while you wait on payment.

In addition, if you’re involved in seasonal work, business lines of credit can help smooth over off-peak periods in your industry.

If you found yourself in a situation where you needed to pay a specific bill, you could go online and apply for a business line of credit that would help smooth over the costs you’re experiencing in the short-term.


Using Funds and Making Payments

Let’s say you have a fruit picking business that traditionally dies down during winter — you still have to pay rent on your land during slow season. If you had a $25,000 business line of credit, you could access $5000 of the available credit in order to pay your rent.

Once you pay back the $5000, plus the interest on the borrowed money, you will have full access to your $25,000 line of credit.

You would only have to pay interest on the $5000 that you withdrew from the line of credit, not on the full amount of accessible credit, $25,000.

As long as you have paid off your balance in full you will always have access to your $25,000 line of credit, and you will only ever pay interest on the outstanding balance.