How To Qualify For A Business Line Of Credit

Does your business need capital injections regularly throughout the year? Are you working in a seasonal industry? Or are you gearing up to expand your company operations or locations?

If you answer YES to any of the above, this might be a good time to apply for a Business Line of Credit (LoC).

What Is A Business Line Of Credit?

A business Line of Credit can be likened to a credit card wherein a company is extended a certain amount as a credit limit. The business owner can withdraw and use any amount (up to the credit limit) when needed for managing business expenses. Like a credit card, interest is charged only on the amount used and only until the money is repaid. Once the money is repaid, the entire amount is available for future use.

Business Line of Credit is usually used for:
  • Short term capital needs, such as for buying equipment, remodeling a store, etc.
  • Covering cash flow gaps
  • Repair and maintenance
  • Marketing
  • Long term needs such as supporting a business expansion

Here’s What You Need To Qualify For A Business Line Of Credit At Money Matters Now:

Personal and business information – You will be required to furnish basic documents pertaining to your business’s identification and registration. Some of these are contact information, identity proof, Employer identification number (EIN), business registration, license, permits, and other legal documents.

Credit score (personal and business) – While we don’t necessarily require a high score to approve business LoC, a better score will unlock higher credit limits and better terms.

Documents to show annual revenue patterns – We would also need documents to analyze the business’s annual revenue. These include:

  • bank statements
  • profit and loss statements
  • business and personal tax returns
  • balance sheet, etc.

Time in business – At Money Matters Now, we also like to ascertain how long you have been in business. Generally, we require a minimum of six months in business to approve business LoCs. The longer, the better!

Information on current debts, if any – We also conduct a quick check to see how your current debt load is structured. This allows us to judge your debt payment or management capabilities. Usually, companies with fewer liabilities and a good payment track record are favored.

Information on current debts, if any – We also conduct a quick check to see how your current debt load is structured. This allows us to judge your debt payment or management capabilities. Usually, companies with fewer liabilities and a good payment track record are favored.

Finally, what are the benefits of using a business LoC?

The biggest advantage of using a business LoC is peace of mind! You can make decisions with the knowledge that you have instant access to money at all times. You don’t have to run around filling out paperwork and waiting on tenterhooks for a funding approval; you have already finished these steps and can go ahead with deals, confident that you can transform your plans into profits.

A Business Line of Credit is a valuable tool for growth, and if you are interested in adding it to your company toolbox, then call us at 877-573-6677 to get started.

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