Steps to Apply:
1
Quick Application:
Complete our simple online form and receive swift approvals.
2
Explore Choices:
Compare various options to find the ideal solution for your needs.
3
Personalize Your Terms:
​Choose the options that best suit your business objectives.
4
Get Funding:
Access funds within a few business days for most programs.
Get Small Business Line of Credit & Increase Cash Flow
Get a Small Business Line of Credit & Increase Cash Flow Prepare for seasonal business expenses, bridge cash flow gaps, or cover unexpected expenses. We have a business line of credit option for you.
Small Business Line of Credit & Increase Cash Flow
Many small business owners have only heard of a few ways to fund their businesses. The most popular business financing options include term loans, equity financing, or business credit cards. Yet, another extremely advantageous option is often overlooked because it's not as widely known: the Business Line of Credit.
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​When small business owners learn how business lines of credit operate, their first thought is, "Why don't more small business owners use this?" A business line of credit is like the best of both worlds. It allows you to access funds without the hassles or costs of other options. You could even view a small business line of credit as a "secret weapon" to bail you out of unforeseen cash flow problems or help you capitalize on unexpected opportunities.
In this guide, we will answer the following questions and more:
What Is a Business
Line of Credit?
An unsecured business line of credit functions almost like a business credit card. You have a credit line from which you can draw funds anytime. If you're carrying a balance, you'll have a minimum payment. You only pay interest on the portions that you borrow. And when you pay off a part of your balance on time, that money becomes available again. This is because most business lines of credit are technically called "revolving" lines.
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A small business line of credit could be critical to a small business's success. Unlike other small business loans, you don't need to reapply each time you want to use the money available. And as the Small Business Administration (SBA) points out, small businesses need access to cash to survive and thrive.
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Online lenders also make it easy to apply for and renew your small business lines of credit. Most online lenders don't require financial statements or tax returns like traditional lenders. While a small business owner might receive lower credit limits for not providing tax returns or financial statements, the best business line of credit for their short-term financing needs may not require those documents.
Max Funding Amount:
$1K – $1M
Factor Rates:
Starting at 1% p/mo
Term:
Up to 36 months
Speed:
1-3 Business days
Once you borrow funds from your small business line of credit, you must pay interest and have a minimum payment like business credit cards. Depending on the lender, your first payment could be due the following week or at the end of the month. If you repay what you borrowed on time, your business line of credit replenishes. For example, your monthly payment is $200, and your interest is $10. If you paid back $200, your credit line would go back up by $190. Your interest rate depends on how quickly you pay off your total balance.
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Sometimes, you may have to pay a small fee (a.k.a. a draw fee) whenever you draw from your business line of credit. Typical draw fees range from 1.6% to 2.5%.
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Though you'll have a repayment term, that's just the due date for your total balance. As long as you pay back your whole balance by that date, the entire credit line will likely become available again. Most lenders even allow you to pay off your total balance early to save on interest. Thus, as long as you keep paying off what you borrow and don't exceed your credit limit, the credit line is essentially yours forever.
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Borrowing limits tend to range from $1,000 up to $1,000,000. Interest rates start at 8%, with terms of up to eighteen months.
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Also, small business lines of credit with lower credit limits and higher interest rates are usually reserved for unsecured business lines. You don't need collateral, such as business assets, though you may have to sign a personal guarantee. However, suppose a small business owner wishes for a higher total credit limit. In that case, they'd opt for a secured business line of credit by putting up collateral such as real estate.
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Business Credit Lines – Research, Facts & Reports
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In 2022, 94% of small businesses experienced a financial challenge, such as supply chain issues, hiring or retaining staff, or cash flow gaps. (Source: 2023 Small Business Credit Survey)
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The percentage of business loan or line of credit applicants rose to 53% in 2022, up from 46% in 2021, but still below the pre-pandemic level of 62% in 2019. (Source: 2023 Small Business Credit Survey)
How Does a Business Line
of Credit Work?
What Are the Advantages of a Business Line of Credit?
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Flexible Payments: With traditional small business loans, you must make monthly payments, plus interest, no matter what. With a small business line of credit, you only have minimum payments when you use the money.
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Adaptable for Emergencies: Perfect for unexpected misfortunes or opportunities.
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Higher Borrowing Limits: Business lines of credit typically offer higher borrowing limits than business credit cards.
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Looser Requirements: Easier to qualify for with less stringent credit or revenue requirements.
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Higher Rates: Online and unsecured lines of credit often come with higher interest rates.
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Timing Matters: The best time to apply is before you need it, which many business owners overlook.
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Collateral Risks: Secured lines of credit may require collateral, putting business assets at risk.
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Business Line of Credit Compared to Other Products:
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Loan Types
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Max Amounts
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Rates
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Speed
Merchant Cash
Advances
$7.5K - $1M
​Starting at 1-6% p/mo
1-2 business days
Receivables/Invoice Financing
$10K - $10M
Starting at 1% p/mo
1-2 week
SBA Loan
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$50K - $5.5M
Starting at Prime + 2.75%
8-12 weeks
Equipment
Financing
Up to $5M per piece Starting at 3.5% (SBA)
3-10+ business days
Business
Term Loan:
$10K - $5M
Starting at 1-4% p/mo
1-3 business days
Revenue-Based Business Loans
$10K - $5M
Starting at 1-6% p/mo
1-2 business days
Business
Line of Credit
$1K - $250K
Starting at 1% p/mo
1-3 business days
What Are the Disadvantages of a Business Line of Credit?
Approved businesses generally meet the following criteria:
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Annual Revenue: $200K+
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Credit Score: 625+
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Time in Business: 6 months+
Who Qualifies for a Business
Lineof Credit?
How to Apply for a Business
Line of Credit
Step 1: Determine How Much Funding You Need - Think about how you'll most likely use your funding and why you are applying in the first place.
Step 2: Gather Your Documents:
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Business bank account statements (past 3 months)
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Driver's license.
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Voided check.
Step 3: Complete the Application
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Submit your application online or over the phone.
Step 4: Speak to a Representative:
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Discuss repayment structure, rates, and terms with a funding expert.
Step 5: Receive Approval:
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Once approved, funds are typically deposited within 1-3 business days.
What If I'm Declined for a Business Line of Credit?
If your application gets declined, it might be because a small business line of credit isn't the right tool for your financing needs. We may recommend other loan options such as working capital loans or business credit cards. If poor credit is the issue, consider credit repair services to boost your personal and business credit scores. This effort can improve your chances of approval in the future.
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