Business Line of Credit
How much are you looking for?
$10,000 – $5,000,000
Starting at 5.75%
as quick as 24 hours
FAQ About Business Line of Credit
What is a business line of credit?
A business line of credit is a flexible type of financing that some small businesses use to address different working capital needs. Small business owners often use business lines of credit for small business so that their business has the working capital available on hand, without paying interest on any of their capital that is not being used.
How do you qualify for a business line of credit?
The main qualifications for securing a business line of credit are the business owner’s personal credit, documentation of the time in business, and the cash flow in the business. If you can provide this documentation to your lender, and demonstrate strong credit, you will most likely qualify for a business line of credit.
How long does the application process take for a business line of credit?
The length of time for the application process will vary from business to business, and different things, like the length of time you have been in business and the number of clients or contracts you can document might influence the likelihood of approval. Depending on the size of the line of credit, a private lender may only need 6 months of bank statements and an application to approve a business for a line of credit.
How would you use a business line of credit?
Businesses typically use business lines of credit for a variety of cash flow challenges. Some of the expenses used by small business owners for business lines of credit include covering unexpected expenses, purchasing inventory, making payroll, and covering different cash flow gaps. With a business line of credit, small businesses have standby capital that’s relatively quick to draw from and can use the funds to cover an expense or to take advantage of an expansion opportunity.
Is collateral required for a business line of credit?
Different lenders have different requirements, and the characteristics of your small business and the line of credit being requested might influence whether or not collateral will be asked from the lender in order to approve a loan. Depending on the size and structure of the line of credit, collateral may need to be required, this is one of the things to consider when picking a lender. Typical small business lines of credit do not require collateral, while larger lines over $250,000 may require collateral.
What are the different types of business lines of credit?
Before exploring business lines of credit for your small business, you should consider the different types of business lines of credit to determine the best option for you. There are a few different types of business lines of credit, including secured lines of credit, unsecured lines of credit, asset-based line of credit, and accounts receivable line of credit. An unsecured line of credit does not require collateral, while a secured line of credit is backed by asset.