Business Line of Credit
Flexible funding to empower your business.
Borrow As Needed
Our revolving line of credit acts as an on-demand extension of your cash flow.
Flexible & Renewable
We provide same-day renewals and early pay off discounts for reduced interest.
Pay Only if Used
Get the entire amount needed in one-shot or use as needed. Secured options available.
Why choose a business line of credit?
A business line of credit is becoming an increasingly popular option for business owners seeking financing, primarily because of the flexibility it permits.
With this financing program, business owners have a maximum limit determined for how much they can spend, but they only spend what they need and will have access to the funds again once the amount borrowed is paid off.
If you already use a business credit card, opening a business line of credit might be for you. New York Tribeca Group is happy to discuss which financing options are best for your cash flow and business spending needs. Feel free to call us for further details, or continue reading to find out more about how a business line of credit can work for your business.
Business line of credit: It’s simple!
It takes just 5 minutes to fill out your application and just a few hours to get offers!
We help you compare your options with ease and always work to get you the most favorable terms.
Our advisors will make sure that the product you have chosen will suit your business needs best.
How to qualify for a business line of credit
Accessing funding for your business is now easier than ever. With online technology, funders can now easily underwrite a business with minimal paperwork and documentation required.
Here’s what you’ll need to qualify:
- 3+ months in business
- $110K+ annual revenue
- 550+ credit score
What is it and how it works
Business lines of credit are similar to credit cards in that there is a set amount one can use, and once paid off, the amount becomes available again. The difference is that this is on a much larger scale, more suitable for the large purchases and cash flows of small businesses.
The general way a line of credit for businesses works is that your company is approved for spending up to a certain amount. As long as you repay back enough to stay within that limit, you can continue buying and paying off as if it is a credit card.
However, every funder and lender will have different details of how accessing the money works. You may have a card with the credit limit on it. You may have an online login with details of remaining available use, current balance, current interest, etc. You may be approved for up to a certain amount and need to send a request every time you wish to make a large purchase. The structure of funding is important to consider when looking at how much liquidity your business has and needs.
Pros and cons of a line of credit compared to loans
Business credit cards can be easily acquired and are more commonly used for day to day purchases like office supplies, mail postage, and tech appliances. Most business owners find themselves comparing business lines of credit to business loans, as the amount of funding is more comparable.
- With a loan, the set amount of money is typically loaned for a set project or use. Additional money will not be needed to be borrowed after this one-time borrowing.
- Both vary in rates depending on credit score or other business documents.
- A line of credit may require monthly updated bank statements to ensure business is still as healthy as when the initial amount was approved.
What do I need to qualify for a business line of credit
Requirements vary per program and deal, so it’s best to have all of your documentation ready on hand. The quicker you return your documentation, the faster you get approved and funded!
- Several months of business bank statements
- Driver’s license
- Tax returns
- Credit Score
- Balance Sheet
It’s best to apply for funding before you need it. When your business is at its peak health, you are most likely to get approved for the best rates and lowest terms. If you wait until you hit a gap in your finances, acquiring funding will be harder. A line of credit is perfect for a rainy day fund up because you have it on hand and only pay for what you use.
How do I apply?
To apply for a business line of credit, simply fill out the form on our website or if you still have questions, give us a call. Have the amount you would like on your credit line ready. You can determine what amount is best for you by examining your balance sheet and calculating the maximum amount you would need for purchases while still being able to pay them back. Just like a credit card, credit lines have monthly minimums, interest, options to pay off early and the ability to increase limits.
Benefits of a business line of credit
Online money transactions have made credit lines a popular option among business owners. You have instant access to the cash you need to grow your business and can monitor your account easily online.
Business lines of credit with lower credit limits are typically unsecured (collateral such as real estate or inventory is not required), however higher credit limits may require some type of collateral for security for the funder.
Merchants can also request an increase on their credit limit if they find the additional cash source to be useful and have an opportunity arise that would require more capital.
Ultimately, the main benefit is that you only pay for what you use.
A business line of credit vs. a credit card
While similar in name and function, there are many differences between a line of credit and a credit card. First, the amount on a business credit card can be limited to several thousand, perhaps several hundred thousand. A line of credit can extend to one million dollars, possibly more depending on the funder.
Secondly, you can still set a term limit. When a credit card is opened it is somewhat indefinite with the expectation it will be used for years. With credit lines, you can still set a term limit just like a loan. You might want revolving credit as a long term cushion for your cash flow, or you might see it necessary for a few years of growth, (longer than six months of short term funding,)but eventually outgrow the need for additional working capital.
Finally, the interest rates will likely be higher due to the large amount of available capital. Credit cards have lower APRs, in general but not always, and commonly have incentives and rewards for spending and paying off certain amounts.
Pitfalls of taking on credit
Just like any form of funding, there are things to look out for that could get you into trouble. Many business owners and regular consumers alike fall into debt because they spend as if they have free money. Credit cards, lines of credit and any other type of funding is not money gifted to your business. Not only that, the money spent requires interest. It’s important to spend smart and only invest in opportunities that create a greater return.
Overspending can be easy when you want the best for your company, but always calculate if you can afford the best. Otherwise, you may find yourself taking out additional loans to pay off your existing debt and falling into what is known as cash advance quick sand.
Debt is a necessary part of running a business. There is no need to fear utilizing a line of credit to access additional working capital and grow your business. Just be smart, and if you ever feel your payments are too much and your business is overleveraged, talk to your funder about other options. They would rather see you make smaller payments but continue to pay rather than default and go under altogether, as that is a lose-lose for everyone.
Got some questions?
A business line of credit is a revolving loan with a fixed amount of capital that can be accessed at any given time.
Similar to a small business loan, a BLOC gives your business the financial ability to use funds for short-term business needs.
The major benefit of a BLOC is that you only pay the interest on what you use, not the entire amount.
After opening a business line of credit, you’ll receive monthly statements on the amount of credit used including the interest rates.
For a small line of credit, advances can be earned if your account is in good standing and you’re making your payments on time.
A business line of credit is a revolving loan with a fixed amount of capital that can be accessed at any given time. Interest is only paid on the credit used.
A credit card is a set amount of money from a bank in which there is agreement that the minimum of any money used should be repaid by a specific due date.
In addition, a BLOC is limited to what purchases can be made.
A business term loan gives you a higher dollar amount, fixed rates, and longer repayment terms making them better for financing long-term.
A business line of credit is better for short-term resolution including covering payrolls gaps, inventory repairs, or emergency aid.
To figure out which financing option works best for you, gather your numbers and create a plan to see which benefits you better.
There are a variety of business lines of credit which makes this financing option one of the more popular ones. The top within the United States include:
- Asset-Based Financing
- Bank Lines of Credit
- Short-Term Lines of Credit
- Long-Term Lines of Credit
Although similar, each line of credit has it’s slight differences for specific use. Research each kind to make sure you’re applying for the correct line for your business needs.
BLOC’s are beneficial in the fact that you have lower APRs than credit cards, have unlimited access to your funds, and have flexible repayment options.
The downside of BLOC’s include higher interest rates, obtaining a high balance can decrease your credit score.
Financing options don’t cost anything up front. There will be interest rates and fees down the line but they will be included in repayments.
We recommend that you calculate how much the business line of credit will cost you by using our calculator.
It’s simple! Just fill out our online application or give us a call and speak to one of our representatives who can help guide you through it.
Upon applying, review your business’s following:
- Annual/Monthly Revenue
- Length in Business
- Credit Score
We review these factors to help make our final decision. Meeting minimal requirements still gives you a likely chance.
Every lender provides different qualifications for their business. We prefer that your business has been running for a good amount of time, a year and beyond is recommended.
A healthy business is vital because it gives the overall summary of how your operations have been running. A good credit score is important but it is not the major key to making or breaking your approval rate for a line of credit.
A helpful tip: avoid applying for a BLOC when your business is declining. It’s better to obtain one when in good standing.
Get industry-leading knowledge and advice to help you make confident decisions.