It’s a good idea to increase your business’ working capital if you want to take it a level higher.
And if you don’t have the cash, a business line of credit is just the thing for you.
Business lines of credit are kinds of low that give you short-term funding, allowing you to have borrow a predetermined amount of money. It’s like a business credit card — you can borrow money, you only pay for the interest rate of the amount you took, and an only be used for business purposes. Like credit cards, a business line of credit has two types — a secured line and an unsecured line.
As with any kind of loan service, not all business lines of credit are created equal. You really need to find the ones that fit the bill when it comes to your needs.
Considerations you need to look into when looking for a lender include the reputation of the lender, the funding or loan limit, the business revenue requirement (basically, the profitability of your business), the borrowing limit, the speed of the funding, and the repayment terms.
Here are some of the lenders you should consider when you are considering to get a business line of credit:
OnDeck: One is a good option for new business owners and if you are looking for lenders who can give you funding immediately. The company is known for having a quick application process (you can find out if you can quality for the business line of credit in a matter of minutes). It allows businesses with a minimum credit score of 500 to borrow money, although they should be in business for at least one year, with annual revenue of $100,000. As is the norm, the business should have no bankruptcies within the past two year as well. Its credit limit is $100,000.
Kabbage: This company also allows companies with a credit score lower than 600 to borrow (there is no requirement, but a score in the area of 500 is recommended). It also provides quick approval and quick funding. It is good for businesses that need a small amount of money (its minimum is at $2,000) but it also offers credit lines of up to $150,000. The business has to be in operation for a year with an annual income of $50,000 and above. It has two repayment plans: a six-month where 1/6 of the loan should be paid, and a 12-month plan where 1/12 of the loan should be paid (both include a fee as well).
Lending Club: If you need big money, Lending Club is the lender for you. The company offers business lines of credit of up to $300,000; however, the company should have a credit score of above 600. Still, Lending Club offers flexible credit lines, even though it works best for more established business. The company should have no recent bankruptcy and should have been in business for at least two years. The business should have annual revenue of at least $75,000. The loan should be repaid within 25 months. In addition, any credit line above $100,000 should be secured.
Don’t just borrow from any lender. Find out who are the best business lines of credit lenders at businesslineof.credit. Check out also this interesting article on how firms use credit lines: http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.1032.8660&rep=rep1&type=pdf
We have compiled a list of the best business line of credit lenders in the market today. Check it out at businesslineof.credit.