Best Business Line of Credit Options Right Now

Best Business Line of Credit Options Right Now

For short-term finance needs, online lenders provide business lines of credit up to $250,000.

A business line of credit can help you manage cash flow, purchase inventory, or pay for an unforeseen expense.

A business line of credit is a form of small-business financing that gives you more options than a traditional loan. Owners of small businesses can borrow as much as they need up to their credit limit, which can range from $1,000 to $250,000. Furthermore, business lines of credit with lesser credit limits are frequently unsecured, requiring no collateral such as real estate or inventory.

 

Our selection for

Lines of credit for businesses up to $100,000

For short-term finance needs, OnDeck offers business lines of credit up to $100,000.

 

OnDeck – Line of credit

OnDeck offers a fast line of credit for small-business owners with less-than-stellar credit who need to manage cash flow or buy inventory.

EST. APR – 11.00 – 61.90% 

MIN. CREDIT SCORE – 600

 

Qualifications:

A minimum credit score of 600 is required.

1 year in business is the minimum requirement.

A minimum of $100,000 in annual income is required.

There have been no bankruptcies in the last two years.

 

Pros

• On the same business day, cash may be accessible.
• Minimum credit score is required.
• There is less paperwork than with most other lenders.

 

Cons

• Early repayment will not save interest due to the fixed-fee structure.
• Weekly payments are required.
• Personal guarantee is required.

 

Our selection for

Business credit lines of up to $250,000 are available.

The line of credit offered by BlueVine provides quick working cash for short-term financing needs.

 

BlueVine – Line of credit

EST. APR – 15.00 – 78.00% 

MIN. CREDIT SCORE – 600

 

Qualifications:

6-month credit line:

A minimum credit score of 600 is required.

6 months in business

$120,000 in annual income.

 

12-month credit line:

A minimum credit score of 600 is required.

6 months in business.

$120,000 in annual income.

 

Pros

• Cash can be obtained in as little as 12 to 24 hours.
• Various term lengths are available to meet a variety of funding requirements.

Cons

• Payment amounts are larger when the payback term is short.
• Personal guarantee is required.
• North Dakota, South Dakota, and Vermont are the only states where this product is not accessible.

 

What is a business line of credit and how does it work?

A credit line functions similarly to a credit card. With a line of credit, you can take out money when you need it and pay it back over time. You can use and repay your line of credit as many times as you want as long as you make timely payments and don’t go over your credit limit. You only pay interest on the amount you borrow, and most lenders allow you to pay off your entire sum early to avoid paying interest.

 

A business line of credit differs from a term loan, which offers a one-time lump sum of money that must be returned over a set length of time, or term. Borrowing limitations on lines of credit are often lower than those on term loans, ranging from $1,000 to $250,000.

 

How can I receive a business line of credit?

To qualify for a business line of credit, you’ll need at least six months in operation and $25,000 in yearly revenue. Although not all lenders have a minimum credit score requirement, borrowers will almost certainly need a score of 500 or above to be considered.

 

Traditional lenders, like banks, as well as internet lenders like OnDeck and BlueVine, offer business lines of credit. Interest rates and borrowing limitations vary a lot based on the lender’s requirements and the borrower’s situation.

Lenders often want personal and business tax returns, bank account details, and business financial documents, such as profit-and-loss statements and a balance sheet, when you apply for a business line of credit.

To qualify for a line of credit, most traditional lenders require a high level of revenue and a long track record. Larger lines of credit may need collateral, which the lender can seize if you don’t pay on time. Similarly, SBA lines of credit have strict requirements.

Qualification standards for online lenders are often less strict than those for banks. These lenders, on the other hand, are more likely to charge higher rates and have fewer credit limits than banks.

Lenders may be able to grant business lines of credit in as little as a few days after receiving approval. New credit lines are typically put up more slowly by banks than by online lenders.

 

What’s the difference between a secured and an unsecured business line of credit?

A secured business line of credit requires you to put up assets as collateral, such as inventory or property. A lender may seize your assets if you do not repay the credit line.

Although no collateral is required to obtain an unsecured business credit line, certain lenders may nevertheless want a personal guarantee or a claim on a business’ assets.

If you default on a loan, a personal guarantee provides a lender the power to seize your personal assets, such as your home. A lien is similar; if you don’t pay back a loan, a lender might seize your business’ assets.

When researching lenders, find out if they want collateral, a personal guarantee, or a lien so you can choose the best option for your business.

 

Business credit cards vs. business credit lines

Business credit cards are also lines of credit, but they differ in several ways from regular business lines of credit.

When you make a draw on a business line of credit, you get a greater credit limit, which can be secured by collateral, and you get actual cash in your bank account. You can get cash with a company credit card, but you’ll have to pay fees and have a higher APR. Annual fees and late-payment fees are two other prevalent expenses for business credit cards.

Smaller ongoing expenses and newer businesses without established finances are best served by business credit cards, whereas bigger ongoing expenses and more experienced businesses are best served by a business line of credit.

Business credit cards, like personal credit cards, can offer incentives or cash back for transactions. Typically, rewards are tied to business expenses like office supplies, gas, internet, and cable. They may also run 0% interest deals, in which you pay no interest on your balance for a set amount of time after you sign up for the card.

 

Frequently Asked Questions

 

When is it a good idea to use a business line of credit?

When you need to finance short-term obligations like replacing inventory or covering unforeseen costs, a business line of credit is the ideal option. Large one-time expenses, such as the acquisition of equipment, are financed using a small-business term loan.

 

What is the best type of lender for a business line of credit?

Business lines of credit are available through online lenders, banks, and credit unions. To qualify for a loan, banks and credit unions often require a substantial amount of revenue and at least a few years of experience. Online lenders have fewer requirements, but they may demand higher interest rates. Compare your options to see which one best suits your financing needs.

 

Is obtaining a company line of credit difficult?

Obtaining a small-business line of credit can be tough for newer businesses. To get any form of financing, traditional lenders, such as banks, often demand businesses to have several years of operations, revenue, and excellent financials.

Apply today with G-Force Funding for business lines of credit from $20,000 – $250,000.