Working differently from a traditional business loan, a business line of credit operates sort of like a credit card – you have a set amount of funds you have access to, but you can use those funds at any time and interest charges only start once you actually borrow from your business line of credit. Instead of being required to apply for a loan with a specific lump sum of capital coming your way, you can have access to cash when you need it, at your own pace.
A business line of credit will serve you only when you need it, while giving you the peace of mind that you have access to financial support at a moment’s notice. There are multiple use cases for having a line of credit and many benefits.
Benefits of a Business Line of Credit
Not only will you be able to access funds quickly, but you can use them however you please! A business line of credit is a tool you should have on hand because you’ll never know when you need it. Here are some of the biggest benefits of having a line of credit:
• It can help you get better credit for your business. By showing that you can borrow money and pay it back in a timely fashion, a business line of credit could greatly help your trustworthiness as a borrower.
• Traditional loans require a set payment schedule that can be difficult to pay back in the specified increments. A business line of credit works like a credit card, so you can pay back a minimum amount each month. On slower months, you can simply pay the minimum and not worry about the rest.
• You get to decide when to borrow and spend your money. As a business owner, you should be entirely in control of your capital, and a line of credit allows you to do just that.
Opening a Line of Credit with UBF
Here at United Business Funding, we offer two tiers when it comes to our business lines of credit. The first tier is meant for C-Corps, LLCs, and Sole Proprietors. It requires a FICO score of 650 or more, 3 years of business operations, and at least $60,000 in monthly revenue. Our tier two offering doesn’t allow sole proprietors, requires a FICO score of 550, 3 years in business, and a monthly revenue deposit of $50,000.
To help our team decide if you qualify, we’ll need to see the last 3 months of your business bank statements, proof that you have been in business a minimum of 3 years, voided bank checks, and invoices where applicable. If you’re unsure whether a business line of credit is right for your organization, reach out to our team today or learn more on our website.