What is a Business Line of Credit?
A line of credit is the closest thing to a financial safety net for a small business. You apply once, get approved for a set limit, and draw from it only when you need to. Interest accrues on what you pull, not the full line. Pay it back and the funds are available again. No reapplication, no new paperwork.
This is the product that covers the gap between when money goes out and when it comes in. Payroll before receivables land, a bulk purchase on short notice, an unexpected repair. Current rates range from 7% to 25% APR depending on your credit, revenue, and whether you're working with a bank or an online lender. We review your full picture and match you with the right structure, secured or unsecured.
How do I qualify for a Business Line of Credit?
Key qualification requirements:
Credit Score
650 or above to qualify for most programs.
Consistent Revenue
Steady deposits shown through recent bank statements.
Time in Business
1 to 2 years of operating history preferred.
Debt-to-Income Ratio
Lower existing debt relative to income means higher limits and better rates.
Interest Rates and Fees
Rates on business lines of credit range from 7% to 25% APR. Most are variable and tied to the prime rate (currently 6.75%), so your cost can shift quarter to quarter. Bank lines average in the 7% to 9% range right now. Online lenders run higher, typically 15% to 35%.
Look past the headline rate. Draw fees get charged each time you pull funds. Annual maintenance fees range from $0 to $500. Some lenders charge origination fees of 1% to 2% upfront, and inactivity penalties apply if you don't use the line regularly. We break down the total cost before you sign anything so there are no surprises.
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