Business Lines of Credit
A business line of credit offers ongoing, flexible access to capital when you need it. Instead of receiving one lump sum, you can draw funds as needed, making it an elegant solution for managing cash flow.
What is a Line of Credit?
A business line of credit is a flexible financing option that provides a set credit limit you can draw from at any time. You only pay interest or fees on the amount you actually borrow. Once you repay the borrowed amount, the credit becomes available to use again, making it a true revolving credit facility.
When running a growing company, having access to reliable capital is essential. The right line of credit can provide the leverage needed to overcome cash flow hurdles, invest in high-ROI opportunities, and scale operations without giving up equity or control of your business.
Key Benefits
Rates, Terms & Timeline
Rates
Interest rates for lines of credit are competitive and are applied only to the outstanding drawn balance. Rates are determined by your business performance and creditworthiness.
Terms
Lines of credit typically have a draw period of 12 to 24 months, with revolving terms that can be renewed. Repayments are usually made weekly or monthly.
Timeline
You can get approved and have your line of credit established in 1 to 3 days. Once established, drawing funds into your account usually takes just a few hours.
How It Compares
A line of credit is much more flexible than a term loan since you control when and how much you borrow. Compared to credit cards, lines of credit typically offer higher limits and allow you to draw actual cash into your bank account to pay vendors who don't accept cards.
Frequently Asked Questions
How is a line of credit different from a term loan?
A term loan gives you a lump sum upfront, while a line of credit gives you a limit you can draw from multiple times.
Is there a fee to keep the line open?
Some lenders charge a small maintenance fee, while others only charge when you draw funds. Your funding specialist will clarify your specific offer.
Can I use it for payroll?
Absolutely. It is one of the most common uses for a business line of credit.
Qualification Requirements
- Minimum $15,000/month in revenue
- 1+ year in business
- Consistent bank deposits
- Fair to excellent credit profile
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