Line of Credit

If you’re looking for a flexible financing option that’s easy to use, consider a business line of credit. Unlike more specific financing products like equipment financing and startup loans, a business line of credit offers impressive versatility.


For example, if your business has a high season and a low season, you could use the line of credit for practically any of your expenses during the slow months. Given this broad range of use, lines of credit can serve as financial safety nets for your business.


Another way that business lines of credit can help protect your business in a pinch is that it’s a revolving form of financing. This means that you don’t receive a lump sum as you would with a traditional loan. Instead, you’re approved for a set amount of money, which you can dip into it as often as you need.


The maximum amount for business lines of credit is usually $250,000. Upon approval, you’ll typically receive access to the funds in under a week. Plan on the financing having a 1-3 year maturity and interest rates starting as low as 8%.

What is a Line of Credit?

Of all the financing products out there, business lines of credit are one of the easiest for new borrowers to manage. Why? Because they function so similarly to the credit cards that most people use on a daily basis.


As with a credit card, your line of credit approves you to borrow a set amount of money. You can access these funds as often as you like, and as the borrowed amount is paid down, it opens access to additional credit.


When your business is running smoothly, you won’t need to dip into the funds. And, of course, you won’t need to worry about repayment.


But during the times when your business needs a fast influx of cash, the line of credit is there to save the day. You can use as much or as little as you need, then pay only for what you borrowed.

Line of Credit

Using a Line of Credit

As mentioned earlier, a line of credit is among the most versatile forms of financing. Here are just a handful of the possible ways you could use one to benefit your business:


  • Boosting cash flow when you have an excess of unpaid invoices
  • Weathering a period of slow sales
  • Hiring and training new employees
  • Funding a major work project
  • Purchasing new equipment or fleet vehicles
  • Taking advantage of a new business opportunity
  • Upgrading your business’s technology


However you decide to use it, a business line of credit offers a high level of convenience to match its flexibility.



Applying for a Line of Credit

If your business has been in operation for 12 months or more, brings in at least $250,000 a year, and your credit score is at or above 680, you should be a solid candidate.

What’s New