Securing a Line of Credit | Small Business Line of Credit » BizFly Funding (2024)

If you don’t have a lot of prior experience with loans and credit, it may be hard to know which option is right for your small business. Depending on your exact needs, a business line of credit can often be an ideal solution.

It can provide you with quick and flexible access to the funds you need to run your business, while helping you to boost your credit history and credit score.

There are numerous benefits to a line of credit as opposed to a credit card account, small business loan, or other small business funding choices, as we’ll highlight in this guide to securing a line of credit.

To start, it’s useful to understand exactly what a small business line of credit is and how it works. A small business line of credit is a type of loan or credit product. It works something like a credit card account, only without the card.

In essence, you are gaining access to a credit facility. You can borrow as little or as much as you want, so long as it is less than your approved credit limit.

Like most credit facilities, you only pay interest on the outstanding balance on the line of credit.

You pay it back over time, making minimum payments (or more if you desire), and can then borrow against the business line of credit again and again, so long as you are below your limit.

Unlike a credit card account, where you use a credit card to make a purchase or transaction, borrowing against the business line of credit gives you cash to spend on your business needs as you see fit.

Put another way, a business line of credit is a form of small business loan. It differs from traditional loans in that you don’t get the money up front as a lump sum payment.

Rather, you borrow what you need against the line of credit, repay it, and borrow again and again, up to your limit.

Like a loan, there is an interest charge associated with the line of credit, but, like a credit card account, you only pay that interest on the outstanding balance (rather than the whole approved maximum).

This can save you significantly as opposed to a small business loan, especially if your intended use amount is uncertain or variable over time.

Of course, choosing between a business loan and line of credit depends on your intended use of the credit or loan, the length of time over which you need money, the length of time over which you intend to repay, and whether or not your needs are largely fixed projections or highly variable.

In the next section, we’ll highlight some of the uses for a business line of credit, and provide information to help you decide if a line of credit is the right choice of small business funding instrument for your small business.

A business line of credit is an ideal solution for a lot of business needs. It’s often considered more affordable than small business loans, as mentioned above, because you only pay interest on the outstanding balance you are actually using.

While actually drawing against the line of credit is usually aimed at paying for short-term or emergency cost needs, many business owners enjoy having the flexibility and safety net a business line of credit offers them.

It allows them to respond to changes in their business, urgent expenses or emergent needs on a revolving basis, without having to apply for a new loan or small business funding source each time something comes up.

Of course, the exact uses will vary from company to company, and the choice of how to use a line of credit may be dictated somewhat by the business line of credit terms.

For example, if the minimum repayments are relatively high, the line of credit is better suited for smaller, short-term expenses.

If, on the other hand, repayments are low and interest rates are affordable, then using the line of credit for longer-term expenses may be warranted.

• Provides working capital and cash flow management functionality
• Allows for purchase of supplies or inventory
• Helps meet payroll and up-staffing expenses
• Ideal for repairs, upgrades, and emergency/one-off expenses
• Useful for targeted marketing campaigns
• Helps to keep bills paid on time and keep you in good standing with vendors
• Allows you to improve your credit history and score

If you want to learn more about a business line of credit, or are ready to apply for a line of credit for your small business, just check out BizFly Funding. They offer a range of small business funding options, including lines of credit.

They’re US-based, and exclusively focused on providing funding for small businesses. At BizFly Funding, you can apply quickly online, and one of the customer service team members will follow-up as soon as possible.

Once your application is approved, you can receive your funds in as little as 1 business day.

Because BizFly Funding is a non-bank alternative lender, they are able to offer more generous, minimal eligibility requirements for many of their small business funding options.

This translates to lower credit scores, less time in business, and lower revenue requirements than you’ll find at a traditional financial institution or bank.

• You must have been in business for at least 6 months as of the time of application.
• You need a business credit score of at least 650.
• You must generate at least $10,000 per month in revenue.
• Credit lines are available from $5,000 to $250,000.
• Interest rates range from 5-10%.
• As this is a line of credit and not loan, there is no fixed term.