A business line of credit represents a versatile solution to meet your evolving cash flow requirements. Unlike a term loan, a line of credit offers the flexibility of borrowing only the amount you need at any given time, ensuring you only pay interest on what you utilize.
Securing a line of credit can be a strategic move for businesses navigating periods of unpredictable revenue or needing to capitalize on unexpected opportunities. It can serve as a safety net, allowing your company to cover short-term expenses or finance growth initiatives without diluting ownership or incurring high-interest debt.
Obtaining a line of credit involves a streamlined pre-approval process. This typically begins with answering a few preliminary questions about your business, offering you an immediate insight into the potential size of your credit line. This rapid feedback is invaluable, helping businesses react swiftly to the ebbs and flows of their operational environment.
In essence, getting a line of credit is a proactive measure that affords your business both flexibility and peace of mind. The process for a line of credit pre-approval is designed to be user-friendly and expedient, providing a fast track to financial security. Make the most of this opportunity and secure a line of credit to fuel your business’s future growth.
Table of contents
Steps to Get a Business Line of Credit
Steps to Get a Line of Credit
- Complete 2 Minute Prequalification Form
If you are not ready to start the application process you can fill out a brief prequalification form. This involves answering some questions about your business revenue, shareholder credit and length of ownership. If you are ready to apply just go to step 2!
- Apply Online
Fill out the online application and attach the last three months bank statements. These statements provide a clearer view of your business’s cash flow, its ability to repay the loan, and its overall financial management.
- Underwriting Process
After submitting your application, the lender will commence the underwriting process. They will perform a ‘soft pull’ on your credit, which does not impact your credit score, to gain insight into your credit history and financial behavior. They will also thoroughly review the bank statements you’ve provided to evaluate your business’s fiscal health. The underwriting process can be swift, with approval decisions made in as little as 24 hours in some cases.
- Accept Term Sheet
Upon approval of your loan, you’ll be emailed a term sheet. This will outline the terms of your line of credit. Take your time to review these terms carefully, ensuring they align with your business needs and capabilities. After you’ve reviewed and accepted the terms, you can draw on the funds when you need them.
Benefits of a Line of Credit
Fast Pre Approval Process: It only takes a few minutes to Pre Qualify. Click the Business Pre-Qualification form and answer a few questions. Pre Approval in minutes, approvals in as little as 24 hours.
Always have Funds available: Businesses tend to have fluctuations in cash flow. A line of credit allows you to always have funds available. Once approved, drawdown anytime for same-day cash in your bank account.
No prepayment penalties: With a line of credit you can pay down the remaining balance without getting hit with penalties. Allows you to save on interest by paying down early.
Flexible Term Options: Multiple term options with weekly or monthly payments.
PreQualify for a Business Line of Credit
Business Line of Credit Frequently Asked Questions (FAQ’s)
A line of credit is ideal for businesses that have short-term fluctuations in cash flow. It can be used to take advantage of short-term opportunities or cover last-minute expenses such as purchasing inventory or covering some last-minute expenses prior to getting paid on a project.
You can purchase equipment with a line of credit but you typically will get better terms with an equipment finance agreement. Business Equipment lasts for several years and it’s better off to structure the financing along with the useful life of the asset.