A business line of credit is one of the most flexible, easy-to-qualify-for, funding options for small business owners. Typically, a lender can provide same day or next day approval, especially if you have all your backup and financial information up to date and ready to go.
The easiest way to think about a business line of credit is to consider it funding on demand. Businesses get pre-approved for a specific amount of money. It’s provided into an account by the lender and the business owner can use it at their discretion whenever they need it. It’s ready and available on demand. There’s no other funding source like it. Other notable benefits include flexible repayment – where you pay the minimum or you pay more when business is booming.
Most business owners enjoy the flexibility of lines of credit. If an opportunity to buy equipment at a bargain price comes up this afternoon, you can use your business line of credit to take advantage of the opportunity. It’s a lot faster than applying for equipment financing if time is of the essence. If equipment breaks down and you need to replace it immediately, a line of credit gives you access to immediate funds so a crisis won’t shut down your operations.
Successful businesses generate enough money to cover the operations and make a profit. However, it’s not always easy to save additional cash for emergencies. That’s where a line of credit can help. You don’t have to use the funds and you aren’t penalized if you don’t. It’s just cash, ready and available when you need it. That gives business owners peace of mind.
How much can I qualify to receive with a business line of credit?
The amount a lender will provide for a line of credit is a set limit based on the lender. How much you can receive as a borrower depends on a few factors. These include how long you have been in business, the monthly revenue you are generating, and the projected revenue you estimate generating, among other things. In some cases, the lender will want to include the business owner’s own personal credit history to help them qualify for the loan. This is especially common when a business is a new business or startup.
At Affinity Beyond Capital we are able to fund up to $250,000 for an unsecured business line of credit. Business owners who are able to secure the loan with collateral are eligible to borrow up to $2 million dollars if they meet financing requirements.
How can I use funds from a business line of credit?
One of the most important benefits of a line of credit is the flexibility in the funding. The funds can literally be used for what the owner feels is most important, from paying salary or utilities, to buying new equipment, to painting the front door or installing a ramp and outdoor seating. Whatever you feel is needed for your business is an option. The flexible use of this funding is one of the main reasons business owners apply for and use it.
Have more questions? Feel free to reach out to one of our loan specialists today!