5 Benefits Of A Business Line Of Credit

How Do I Get A Business Line Of Credit?

Often times business owners will find themselves in a position when the cash flow of the business has slowed down, and then start to worry about how you will cover any unexpected expenses, or maybe even just everyday expenses. In this situation, a Business Line Of Credit, sometimes referred to as a Revolving Credit Limit, may be the perfect solution.

The next thing to consider is if you want a secured, or unsecured Business Line Of Credit. 

With a Secured Line Of Credit, the bank will ask you to put up your assets as collateral to secure the loan. It makes them feel more secure knowing that if you default, they can sell off your assets and get some of the capital back. A Secured Line Of Credit will normally take 60-90 days to complete, and require a great deal of paperwork.

With an Unsecured Business Line Of Credit, you will not be asked to put up any of your assets as collateral, which does put a lot more risk on the lender, and make them a little trickier to get. 

Here at Small Business Capital US, we have made the process very simple to obtain an Unsecured Business Line Of Credit. The rest of this article will explain in detail the how, why, and advantages of obtaining an Unsecured Business Line Of Credit from Small Business Capital US.

A Closer Look At Secured VS Unsecured Business Line Of Credit.

Lenders do feel more comfortable giving a Secured Line Of Credit due to the fact that you are required to put some sort of collateral, or maybe even a deposit. 

Collateral most often involves real estate or personal assets such as vehicles. A deposit would be similar to a Secured Credit Card. In either case, if you default on the loan, the lender has either your personal assets to turn into cash, or your actual cash to use towards the default.

As a business owner, you may not feel comfortable with the lender holding your assets, with the possibility of losing them if something goes wrong.

In this case, and Unsecured Business Line Of Credit would be a better option for you. 

As you are starting to see, no collateral is required with an Unsecured Business Line Of Credit. As a business owner it takes away the risk of losing your personal assets such as your home and vehicles.

So you might ask, what's the catch?

The catch is that higher annual revenue is a requirement, as well as having good to excellent credit. 

When compared to a Secured Business Line Of Credit, an Unsecured Business Line Of Credit will have a higher cost associated with it, and require that your business be more qualified.

Due to the fact that your business is not putting up any collateral, it puts a much higher risk factor on the lender. Because of this, the underwriting process becomes stricter, requiring more annual revenue, longer time in business, and personal credit that is in the good to excellent range (Minimum 630 FICO).

Like most business owners who need working capital, putting up collateral is not an option, and makes the Unsecured Business Line Of Credit the best option. Initially, those who qualify for this product will start out with higher interest rates, short term repayment options, and smaller credit limits.

Once a relationship is established with the lender, the rates will get lower, terms get longer, and credit limits are increased, ultimately becoming comparable to a Secured Business Line Of Credit. 

Typical Requirements Needed To Apply For A Business Line Of Credit.

After all of this talk about an Unsecured Business Line Of Credit, you might be wondering what is typically required to apply for this product. Here are a few typical conditions where business owners are approved for this product at Small Business Capital US:

1) 630 FICO and above.
2) Minimum 1 years in business.
3) Minimum $180,000 annual revenue.
4) No NSF or negative balances in the last 90 days.

If your business meets or exceeds these requirements, you're typically in good shape to get an Unsecured Business Line Of Credit.

As with any loan product, credit limits and interest rates will vary depending on your FICO score, how long you have been in business, and your annual revenue.

5 Benefits Of An Unsecured Business Line Of Credit

When the time comes that you want to expand and grow your business, having money on tap, that you can draw from as you need it, is very convenient, and may be the perfect product for your business. Here are some of the benefits that come with having an unsecured business line of credit.

Lower Cost Than Credit Cards:  An unsecured business line of credit will generally have a higher cost that traditional bank loans, but still much lower that business credit cards.

Ability To Manage Cash Flow:  When cash flow is somewhat unpredictable due to season, or maybe even something that is specific to your industry, you can still take comfort in being able to manage your cash flow by drawing from your line of credit.

Making Larger Purchases:  When the time comes that you may need new equipment, or anything that requires a larger amount of money, a line of credit makes it easy to complete those purchases quickly. Credit cards on the other hand will not have as high of limits, and the interest paid is also much higher.

Emergencies: A line of credit can be a life saver when difficult times come. It is not recommended for long term difficulties though, but mainly for short term fixes. 

It Is Revolving Working Capital:  Unlike getting a traditional loan at a bank where you have to reapply every time you need working capital, a line of credit gives you the ability to repay and then immediately take out the funds again with no hassles.

At Small Business Capital US our goal is to have a long term relationship with every customer. Therefore, we strive to get every customer qualified for an unsecured line of credit first. If one of our customers does not qualify initially, we will find a way to get them the funding they need, on favorable terms, until we can transition into a line of credit. 

Our process is simple and transparent. 

Once you have submitted our simple one page application, along with your last 3 months business bank statements, your file goes into our underwriting department immediately, where an underwriter is assigned to your company. Within 24 hours (usually same day) your underwriter will call you directly to discuss the funding options, no middle man, just you and the person handling your loan. Our customers love the direct contact and the transparency they have with dealing direct, no pushy sales people to deal with.

If you feel that an Unsecured Business Line Of Credit is beneficial to your business, just click on the "Get Started" button below. You will be directed to a simple application (takes about 3 minutes), and once you hit the submit button, you will be contacted immediately by one of our expert team members to assist you in getting your information submitted to your underwriter. 
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Small Business Capital US

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