What Does It Take to Get a Business Line of Credit?

Independent business ventures often need extra cash flow. Lines of credit can provide the ideal solution. They supply immediate funds to the operations they serve whenever necessary. Young companies, though, sometimes hesitate to seek such help. Their trepidation stems from a lack of understanding. Luckily, the process isn’t as complex as they may suspect. Briefly researching the topic should set them on their way.


The first stage is measuring the applicant against the potential lender’s list of requirements. Having a decent credit score remains imperative. That said, alternative lenders are often willing to consider working with those who have less favorable numbers.

Similarly, the enterprise must be generating revenue. The more the business earns, the better the odds of lenders opening their wallets.


Businesses with impressive histories have several alternatives before them. Understanding the pros and cons of each should help pinpoint which makes the most sense.

Traditional banks are great because of their affordability and attractive terms. The downside is that they set the bar for acceptance higher than others. Applicants that do not match these requirements might want to pursue an online source. Although their rates may be higher, web-based lenders usually get money to applicants within two business days. Joining a credit union remains another possibility.

Rates and Fees

Anyone seeking a line of credit needs to understand the ultimate cost. To do otherwise could lead to financial ruin.

The Annual Percentage Rate is the percentage of the loan amount that is being charged. This amount needs to be in line with one’s budget. Shorter-term borrowers ought to consider the simple interest rate. Ultimately, this path could be cheaper in comparison.

Fees may be hiding, so it remains wise to keep an eye out for them. Draw fees and payment processing fees, for instance, can add up. Those having trouble keeping up with payments might trigger late fees or termination fees that add insult to injury.


Once one has a suitable source of credit, all that’s left is to apply. Applicants must carefully fill out every section of the questionnaire. Also, hopefuls must provide proof that shows they are a reasonable risk to the lender. Collecting bank statements, financial records, and tax returns early on makes this stage more efficient. Lenders smile when these supplemental materials are organized and complete.

Lines of credit make sense for all types of commercial operations. Establishing one shouldn’t be a mystery. Understanding what it takes to achieve success should help yield desirable results.

If you own or manage a business and are seeking additional capital to help you reach your goals, contact us to help you determine which financing option is the best choice.