Sometimes, as a business owner, you might be faced with surprise expenses that might be difficult to cover quickly. In this kind of situation, you need a fast solution that traditional bank loans will not accomplish as fast as you might need. Accessing funds is done a lot faster using a business line of credit.
A business line of credit is a lot more flexible when it comes to the required documents. Depending on the number of funds needed, some lenders only ask for the last 3 months of bank statements. This is most commonly found when accessing money for your business from an online lender.
For some business owners, the most important thing about a business line of credit is how fast it can get approved. Traditional methods to finance a business can take several months from request to pay-out. With online lenders, a business line of credit can be approved and transferred in one or two days. Let’s see why and how to get a line of credit!
Benefits of a Business Line of Credit
Getting a business line of credit comes with many benefits that you might now be aware of. As far as drawbacks, the only one is the limit you can withdraw. Typically, the maximum amount a business owner can ask from a money lender is $250,000.
The first significant benefit, when using such a line of credit, is how you are able to manage the funds. A standard loan gives you all the money in one payment and then sets a fixed fee of payments to cover the loan. With a line of credit, you have access to all of the funds immediately, but you can choose how much you want to use and how much you want to return.
For example, you can request 10,000 dollars and, in a few days, repay the entire sum back. When you repay the credit line faster than anticipated, you will avoid any monthly fees saving a lot of money.
Another great benefit is the minimum number of documents necessary to approve a line of credit. With many online lenders, you will only need to provide personal information and the last 3 month of bank statements. The flexibility that comes with this kind of credit line will save a lot of time and headaches that come with gathering documents typically requested by traditional business loans.
Business lines of credit are better for solving short term problems. If you plan on making a long-term line of credit, you might end up losing a lot more money than you would have lost if you had requested money from a bank. Paying back the requested money as fast as possible will be the only way you end up paying less for your loan. Try to have a clear plan in mind when accessing a credit line to be able to take advantage of this benefit.
For some business owners, this is the most important benefit: lines of credit help save time. If you are running a small business, you know that time is money. If your time is extremely valuable and you can’t waste it on unnecessary documents, the business line of credit is definitely for you. It helps eliminate a lot of the hassle needed for a traditional loan.
Fees and Rates
Fees for credit lines vary from lender to lender. The most important fee to look for is the annual percentage rate or APR. This will determine how much interest you will pay. Other significant fees to watch out for are draw fees, payment processing fees, late fees, termination fees, and prepayment fees.
How to Apply
Applying for a line of credit is very simple. You need to select a lender from many available. For instance, Fundbox is suitable for small businesses and offers up to $100,000 business line of credit. All you need to do is go on their website, make an account, and within two days, your credit line will be approved or declined.
Keep in mind that many lenders loan based on your credit score. The required credit score is smaller than what a bank needs, Fundbox will approve a credit line if you have a minimum score of 500 points.
Contact Information
You can contact Fundbox using the following details if you want to find out more information:
Address: 300 Montgomery St. STE 900 San Francisco, CA
Phone: 94104 (855) 572-7707
Email: support@fundbox.com
Consult the terms and conditions page for more information.
