Business Line of Credit Requirements

In today’s post, I want to revisit a widely-discussed topic; business lines of credit. If you want to know what the requirements are to qualify, and the standards imposed for each type of business line of credit then keep on reading.

Given all the business line of credit requirements and options that are out there, it’s important that you take some time to determine what your goals are, what the line of credit will be used for, and which options are available to you based on the requirements listed below.

The bottom line is making sure you pre-qualify for the right type of business line of credit at the right time can greatly impact your funding success, so let’s go over the requirements in detail:

Traditional Unsecured Business Line of Credit

Going the traditional route, you can obtain a business line of credit from a bank where you can write checks against the credit line for any type of business expense or purchase.  The amount of funds you can access depends on the maximum limit set by the bank.

A traditional business line of credit is a funding source that can be used on an as-needed basis so you don’t have to use it at all. You only spend what your company needs, and you only pay interest on the amount you spend, not on the entire credit line.

It’s similar to a business credit card in that you have the same flexibility when it comes to how you repay an outstanding balance. With a traditional credit line, you can either pay the entire outstanding balance at once, or you can just make minimum monthly payments which are typically 2.5% – 5% of the balance.

Since it is a revolving account you can spend the cash, repay it and spend it again, in a virtually never-ending, revolving cycle like a business credit card. The main advantage to a traditional line of credit versus a credit card, though, is that the interest rate is usually lower.

In addition, if you need the ability to write checks for major purchases such as real estate or access lump sums of cash then a traditional line of credit may suit you much better since getting a cash advance from a credit card is typically pricier.

Highlights for TBCL (Traditional Business Credit Lines)

• Business lines of credit from $35k – $200k
• Spouses and business credit partners can apply to increase the total funding to as much as $400k
• Flexibility to draw on funds when you need them
• No collateral required
• Interest rates between 7-10%
• Flexible monthly repayment from 2.5% to 5% of the outstanding balance

What are the business line of credit requirements for TBCL?

Banks typically require much more documentation compared to non-traditional credit lines. Our traditional business credit lines program (TBCL) is credit based and requires proof of income. Here are the requirements to pre-qualify:

• FICO® credit scores of 680+
• Verifiable personal income of $2k per month (minimum) OR $2k net income per month for business (minimum)
• Entity structure (Corporation, LLC, etc.)
• No bankruptcies, foreclosures or tax liens
• Startups are acceptable

How to pre-qualify:

Obtain a recent copy of your tri-merged personal credit report in PDF format. We recommend getting the report from http://triadcreditreport.com.  You can register for $1.00 and then download your report.

CLICK HERE to upload your credit report to Pre-Qualify

*Pre-qualification results take 24/48 hrs

Note: The credit lines we set up through our Traditional Business Credit Lines (TBCL) program are from banks and credit unions which are much more affordable credit lines (7% – 10% rates). Online providers that you see offering lines of credit such as Kabbage have rates ranging from 20% -40%.

Non-Traditional Unsecured Business Line of Credit

Non-traditional business lines of credit come in the form of business credit cards which you can use for purchases and cash advances. These cards are different from standard credit cards because they report only to the business credit reporting agencies and come with much higher credit limits whether you’re a startup or existing business.

While any credit card can provide a business owner with quick access to cash, a business credit card offers a lot more. “There are plenty of benefits to using a business credit card versus a personal credit card for your small business,” says Alison Cahill-Rouse, a spokeswoman for Capital One. “You’ll also have access to business-specific benefits, such as employee cards and spending controls, and specialty service tailored to meet small businesses’ needs.”

Highlights for UBCL (Unsecured business credit lines)

• Business lines of credit from $15k – $150k
• Use your business credit lines anywhere Visa® or MasterCard® is accepted
• No collateral, financials, tax returns or proof of income required
• Introductory APR at 0% for 6/9/15/24 months
• Annual APR between 7.9%-19.9%
• Flexible monthly repayment from 1% to 2% of the outstanding balance
• Keep business and personal expenses separate
• Builds your business credit reports/scores

What are the business line of credit requirements for UBCL?

• Our non-traditional unsecured business credit lines program (UBCL) is strictly personal credit based. Here are the requirements to pre-qualify:
• FICO® credit scores of 680+ (credit card utilization under 50%)
• Entity structure (Corporation, LLC, etc.)
• No bankruptcies, foreclosures or tax liens
• Business credit partners are accepted
• Startups are acceptable

How to pre-qualify:

Obtain a recent copy of your tri-merged personal credit report in PDF format. We recommend getting the report from ProCredit. You can register for $1.00 and then download your report.

CLICK HERE to upload your credit report to Pre-Qualify

*Pre-qualification results take 24/48 hrs

Note: The credit lines we set up through our Unsecured Business Credit Lines (UBCL) program are from regional and national banks.

While having a business line of credit at your disposal can provide peace of mind, make sure you select the right type of credit line that best fits the needs of your business.

Read to apply for unsecured business lines of credit that build your business credit? Submit your information below and a funding specialist will contact you within 24 hours. Plus receive my FREE business credit seminar audio ($597 value)=>

To Your Success in Business and in Life!

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About the author

Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for Dun and Bradstreet Credibility Corp, the SBA.gov Community, Business.com, About.com and All Business.com. His articles and blog; Business Credit Blogger.com, have been featured in ‘Fox Small Business’,’American Express Small Business’, ‘Business Week’, ‘The Washington Post’, ‘The New York Times’, ‘The San Francisco Tribune’,‘Alltop’, and ‘Entrepreneur Connect’.