WHAT IS A BUSINESS LINE OF CREDIT?
A line of credit (LOC) is a flexible revolving loan, in which a lender, usually a bank or a private lender, and a borrower, agree to a maximum amount of capital that the borrower can withdraw at any time. The borrower has these funds at his or her disposal, as long as he or she does not exceed the maximum amount established in the agreement and makes payments on time.
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The balance in a line of credit is revolving, meaning that the borrowers can use the funds, repay, and then spend again in a revolving cycle. In this way, lines of credit are very similar to business credit cards.
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Business owners will typically use a line of credit to remodel or expand their store/offices, buy new tools or equipment, meet payroll, purchase inventory, launch a marketing campaign, or cover any unexpected expenses.
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An essential advantage of a business line of credit for business owners is that it provides more flexibility than a regular business loan.
HOW DO I GET A LINE OF CREDIT FOR MY BUSINESS?
If you apply for a line of credit with a traditional bank, you will have to fill out extensive paperwork to prove that you have a steady cash flow and a reliable credit score. Even after submitting all the paperwork, there is no guarantee that your loan will be approved. Our lenders, on the other hand, have looser qualifications than banks.
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To obtain an unsecured line of credit, all you need is at least 1 year in business and $20,000 or more in monthly revenue. After reviewing your application and business’ revenue, within 24 hours or less, you will know if you have been approved. You should also get an offer that will break down your rates and loan terms.
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If you get approved for a line of credit but don’t need to withdraw any funds yet, don’t worry. You will only pay interest on the money you use. If you don’t use any funds, you won’t pay anything back.
WHAT IS THE DIFFERENCE BETWEEN UNSECURED AND SECURED LINES OF CREDIT?
If you are considering getting a line of credit for your business, keep in mind that there are two types; a secured Line of Credit and an unsecured Line of Credit.
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The difference between the two is that in an unsecured Line of Credit there’s no collateral required, therefore the approval process will be faster.
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Whereas in a secured Line of Credit you can get a higher borrowing amount since the Line of Credit is secured against your assets. Most of the time, small business owners will prefer an unsecured line of credit.
QUALIFICATION CRITERIA
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I Year Time in Business
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Average Monthly Revenue $20,000
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6 Months Bank Statements
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Less than 5 Negative days of Overdrafts per month
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630 Minimum Credit Score
DOCUMENTS REQUIRED TO APPROVE:
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Signed Application
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Completed Personal Financial Statement
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12 months of Business Bank statements (all pages)
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2 Years of Business Tax Returns
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2 Years of Personal Tax Returns
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Year-to-date Financial Statments
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Profit & Loss Statement
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Balance Sheet
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Copy of Recent Credit Score
BENEFITS:
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Funds could be used for general business purposes
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Great for any Business that needs working capital
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Up to $5,000,000
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Funding time within 30-60 days
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Long Repayment Terms (3-25 years)
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Lowest Interest Rates (5%-9%)