Are you having cash flow problems for your business? Not sure how you’re going to pay upcoming bills? A business line of credit may be the solution you’re looking for.
Every day of a small business owner’s life has challenges, and cash flow problems can be especially troubling. Most entrepreneurs don’t realize how crucial cash flow is for their company’s survival until working capital is low and payroll is
What is a Small Business Line of Credit?
A business line of credit is a short-term loan, typically used for regular operating expenses such as covering bills or when cash is needed for unplanned expenses. A business line of credit can be an emergency fund to draw on whenever needed.
Like credit cards, business lines of credit are revolving credit loans. Borrowers apply for a preset lump sum to use when needed and then pay it back according to the loan’s terms. Business lines of credit are to be explicitly used for business-related expenses; however, any amount can be drawn up to the credit limit. Payments are made only on the drawn amount; once the money is paid back, the funds are available to use again. Payment terms vary by lender. Some require monthly payments with interest, and other fees may also be involved.
Requirements For a Business Line of Credit
While applying for traditional bank loans may take weeks and sometimes months to finally receive a decision, applying for a business line of credit is typically much faster and, depending on the lender, can involve less hassle. Business lines of credit may be secured or unsecured business lines. Secured lines of credit mean the loan is backed by the borrower’s assets, such as real estate. Unsecured business lines of credit require no collateral but often have higher interest rates.
To apply for a business line of credit, prepare to provide the following documentation:
- Recent business tax returns
- Recent personal tax returns
- Bank account information and bank statements
- Financial statements (balance sheet, income statement)
- Federal Tax Identification Number or Employer Identification Number (EIN)
- Social Security Number
- Business entity type (sole proprietorship, partnership, corporation, limited liability company)
- Past loan documentation
Once you’ve gathered the proper documentation, see what qualifications each lender requires. For example, a Bank of America business line of credit may require $100,000 in prior year annual gross sales, and a Wells Fargo business line of credit may need the company to have $2-5 million in annual sales.
Why Get a Business Line of Credit From Financing Solutions?
A business line of credit works great for any company looking to improve its cash flow, plus it has many advantages, including a simple application and a quick approval process. And, as long as payments are made on time, a business line of credit can also help improve your company’s credit score.
Unsecured lines of credit, like the kind Financing Solutions offers, do not require collateral and are easier and faster to obtain. Where a bank line of credit could take three to six months to get in place, Financing Solutions could have your money to you within a week, solving your small business cash flow management issues. And in some cases, unsecured lines of credit from Financing Solutions are cheaper than a bank line of credit.
Financing Solutions is an alternative lender offering an easy application process (it takes less than two minutes to fill out) and requires no collateral or documentation to get a written offer letter. Other alternative lenders have a much longer application process and can be fairly expensive.
The founders of Financing Solutions have started and grown several companies together, so we understand how important it is to keep costs low. That’s why we don’t charge you to set up the credit line, and there are no maintenance fees. We don’t ask for personal guarantees, and applicants can receive a no-obligation offer letter the same day. We make approval decisions based on our decade of experience working with small businesses. Find out today why we have five-star ratings from the Better Business Bureau and Google. Also:
- There are no costs to set it up or keep it in place
- The easy 2-minute application online application
- If approved, you’ll receive a same-day, no-obligation offer letter
- The fastest setup, 48-72 hours
- Once you have the line of credit, requests for funds are wired to your bank in minutes.
- You can use your line of credit whenever needed
- Inexpensive when used (low fees)
- There are no restrictions in place or collateral required
- No personal guarantee is required, either
- Financing Solutions is a leading provider of lines of credit
- We are a reputable company with an A+ & 5-star rating
- You can pay off the line whenever you are ready
- The credit line is easy to renew and renews yearly
- You have a secured account portal access 24 x 7
A business line of credit is a good funding resource available whenever your company needs it, without the heavy burden of term loan requirements. If you want to see if your small business would be approved and for how much, please fill out the no-obligation, 2-minute line of credit application here.