OVERVIEW
Business Line of Credit
Minimum
Loan Amount:
$10,000 +
Minimum
Credit Score:
680+
Repayment
Options:
6 - 36 Months
Payment
Frequency:
Weekly or Monthly
ALL ABOUT BUSINESS LINE OF CREDIT
What Is a Business Line of Credit?
A business line of credit (LOC) is a type of small business loan that provides a business with a revolving credit line. Lines of credit can be accessed when needed and repaid at a predetermined time lapse – very similar to a credit card. Only the amount withdrawn will be subject to interest rates, and once repaid, the business can make revolving withdrawals up to the approved limit.
Small business lines of credit tend to be lower-risk revenue sources compared to those relative to business credit card loans. Credit cards tend to be at a higher interest rate compared to business lines of credit.
Lines of credit are a matchless option for businesses looking for flexible financing and access to funds when needed. Small business owners open lines of credit to always have the immediate option and access to funds. Even if financing is not needed, most successful entrepreneurs always have a base of funding ready when needed.
Business Line of Credit Topics:
In fact, 44% of businesses opened each year survive past the four-year mark, according to the Small Business Administration (SBA). The SBA found that successful businesses whom survived was due to consistent cash flow administration.
Businesses can use funds from a line of credit to acquire items that are not typically funded by a traditional loan. Small companies commonly use this type of short-term working capital for everyday expenses, which include, but are not limited to:
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Labor/staffing costs
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Purchasing supplies, materials, inventory, etc.
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Maintenance and repair costs for business Equipment
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Expansion and business opportunities
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Construction and build-out
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Emergency expenses
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Special events and projects
THE STEER PROMISE
Helping Small Businesses Grow Across The U.S.
At Steer Financial, we understand that no two businesses are alike. We offer financing solutions as unique as the business owners we help. Together, we can help steer your business to its full potential. Step one is determining which type of financing is ideal for your business. We work hard to deliver honest, reliable, and transparent customer service so you can feel confidence choosing us to help you meet your business capital needs.
Serving All 50 States
By leveraging our network of 45+ partner lenders, we can offer tailored solutions to businesses across the U.S. regardless of their size or industry.
Secure + Safe Data
We strive to keep all of your information secure and private. We assign a funding specialist to guide you along the entire process.
10+ Years of Experience
Our expertise has enabled us to understand small businesses and offer the highest level of service to you and your business.
HOW IT WORKS
How Does a Business Line of Credit Work?
Business lines of credit are typically unsecured, which means that business owners do not need to guarantee any collateral. When a small business applies for a line of credit, they will be given an approval for a particular credit limit after underwriting. A credit limit, is the maximum amount a small business will be approved for under the terms described on the offer. A small business owner is permitted to withdraw funds from the line of credit up to the maximum amount allowed. For instance, if they have a line of credit for $50,000, they have the ability to borrow $10,000 for one project, pay it back, then borrow $20,000 for another project, and so on and so forth until the end of the terms given by the lender.
Business Line of Credit Alternatives
There are a variety of methods that lines of credit are issued. Some smaller credit limits are issued by a credit card linked to the line of credit. Other times, lenders opt to offer an instant transferring of funds from the credit line to the business bank account. This allows business owners to have various options that fit their needs.
When a small business applies for a line of credit, they will be given an approval for a particular credit limit after underwriting. A credit limit, is the maximum amount a small business will be approved for under the terms described on the offer. A small business owner is permitted to withdraw funds from the line of credit up to the maximum amount allowed. For instance, if they have a line of credit for $50,000, they have the ability to borrow $10,000 for one project, pay it back, then borrow $20,000 for another project, and so on and so forth until the end of the terms given by the lender.
In most cases, the business is required to make payments on the whole amount of money that they have obtained through borrowing. The small business will only be responsible for paying interest on the amount that they actually take out, rather than on the whole credit limit. This indicates that if they borrow $10,000, the interest that they pay will only be on that amount and not on the total $50,000 credit limit that they have available to them.
When a small business repays the total amount that was borrowed, the credit limit eventually becomes accessible again. This indicates that they are eligible to borrow money once more without having to submit a new loan application. The business owner is free to use the money toward any kind of cost that is connected to the business, and they have the option to make withdrawals from the line of credit whenever it is necessary to do so.
It is essential to be aware that a business line of credit may come with costs attached to it, such as an annual fee, a withdraw fee, or an inactivity fee. Depending on the lender, some of the conditions will be determined upon credit review, business cash flow, and other conditions.
THE ADVANTAGES
What Are the Benefits of a Business Line of Credit?
A business line of credit is a type of financing that allows businesses to access funds on an as-needed basis. Here are some benefits of a business line of credit:
Flexibility to obtain capital
A business line of credit gives businesses the flexibility to access funds when they need them, without having to go through a lengthy application process for a loan. Businesses can use the funds to cover unexpected expenses, take advantage of opportunities, or bridge cash flow gaps.
Lower costs
A business line of credit typically has a lower interest rate than a business credit card or a short-term loan. This can help businesses save money on interest charges over time. Using Steer Financial to obtain your business line of credit, would eliminate going through a traditional bank and having to open a business bank account upon approval. Steer Financial's partners with lenders that offer business lines of credit with easy application and requirements.
Improving business credit score
By using a business line of credit and making timely payments, businesses can improve their credit score. A higher credit score can help businesses qualify for better financing terms and rates in the future.
Building relationships
A business line of credit can help businesses build relationships with lenders. By establishing a history of responsible borrowing and repayment, businesses can improve their chances of obtaining financing in the future and building a positive reputation with lenders.
WHO SHOULD APPLY
Who Should Get a Business Line of Credit?
A business line of credit can be a useful financing option for a variety of businesses. Generally, businesses that have unpredictable or fluctuating cash flow needs may benefit the most from a business line of credit. For example, a seasonal business may need to access funds during the off-season to cover expenses, while a business that experiences periodic cash flow gaps may need a short-term solution to bridge those gaps.
Additionally, businesses that have a track record of responsible financial management and consistent revenue may be more likely to qualify for a business line of credit with favorable terms and rates. This can include established businesses with a solid credit history and startup businesses with a strong business plan and projected revenue.
Overall, a business line of credit can be a flexible and cost-effective financing option for businesses that need to access funds on an as-needed basis and have a plan to repay the borrowed funds. It's important for businesses to carefully consider their cash flow needs and ability to repay before applying for a business line of credit.
At Steer Financial, we work hand in hand with you and our financing partners to help your small business secure the financing you may need regardless of the industry you are in.
LOAN USES
What Can a Business Line of Credit Be Used For?
A business line of credit can be used for a variety of purposes, depending on the needs of the business. One of the primary advantages of a business line of credit is its flexibility, allowing businesses to access funds as needed and use them for a wide range of expenses. Some common uses of a business line of credit include:
Covering unexpected expenses
A business line of credit can provide a source of funds to cover unexpected expenses, such as equipment repairs or emergency repairs to a business property.
Financing growth opportunities
Businesses can use a line of credit to fund growth opportunities, such as expanding into new markets or launching new products.
Managing cash flow
A line of credit can be used to manage cash flow gaps, such as paying suppliers while waiting for customer payments.
Purchasing inventory
A line of credit can help businesses purchase inventory and maintain adequate levels of stock to meet customer demand.
Overall, a business line of credit can provide businesses with the flexibility to access funds when they need them and use them for a wide range of purposes to support their operations and growth.
MINIMUM REQUIREMENTS
How To Qualify and Get a Business Line of Credit
At Steer Financial, we will work closely with formulating a plan for your business. We will assess your business with our partnered lenders to evaluate the strengths and assets your business has to decide on the loan's size and conditions. Strong financial statements and a high credit score might also increase your chances of being approved. To make sure a business line of credit is a realistic choice for your business, our funding specialist will walk you through the entire process from start to finish. Below is a quick overview of the minimum requirements in order to get an approval:
Time In Business
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At least 3 year in business.
Monthly Revenue
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At least $20,000 per month in deposits.
Personal Credit
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Minimum of 680+ personal credit score.
Financial History
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1 year free from any open bankruptcies
HOW TO APPLY
Three Easy Steps to Secure a Business Line of Credit
Same-Day
Decisions
We have partnered with over 45+ lenders to ensure that we match your business with the best lender and the most competitive rates. We work quickly to provide an approval in as soon as a few hours.
Fast
Funding
By utilizing our streamlined fast funding approach, your business can access the necessary capital in as little as 24 hours from the moment you approve the terms, ensuring a timely and efficient process.
