Who Qualifies for a Business Lines of Credit?
With Clarify, business owners in a wide range of industries can get pre-qualified. While both good and bad credit scores can secure a credit line, here is what we recommend:
1. Time in business
Your business must have been operational for at least 6 months.
2. Monthly or annual revenue
Your company should generate at least $10,000 a month ($120,000 a year) in gross revenue.
3. Credit rating
A credit score of at least 550. The better your score, the better the interest rate you will receive from lenders.
How to Get Approved for a Business Line of Credit?
Applying for a business credit line is a quick and easy process. While traditional banks have a lengthy and slow process, Clarify provides approval and funding within 1-2 days.
Step 1: Get your documents ready
To speed up the process, we recommend you get the following documents ready in advance:
- 3 to 12 months of recent bank statements
- 1 to 2 years of tax returns
- Profit & Loss (P&L) statement
Step 2: Apply online
Our application takes less than 2 minutes to complete. Once you submit it, a dedicated Clarify advisor will do all the legwork for you.
Step 3: Go over lender offers with your advisor
We'll walk you through the pros and cons of each offer from lenders in our network to identify the best credit line for your specific business needs.
Line of Credit vs. Business Credit Cards
While a business credit line works similar to a business credit card, there are several key differences. A line of credit offers much lower interest rates than credit cards. Some lenders also offer longer payment terms than the required monthly payment schedule of a credit card.
Credit cards also charge extra fees for balance transfers and cash advances. If your goal is to grow your business, a line of credit is always a better, more flexible option.
Common Uses for a Business Line of Credit
We’ve outlined the top ways business owners use credit lines below. Whether you’re looking to build out your business, fill in a cash flow shortfall, or prepare for the unexpected, we’ve got you covered.
Scaling growth often requires business owners to invest additional capital to meet the needs of a growing customer base. Pull from a readily available pool of funds to help build out your company.
Credit lines can be used to free up cash flow, so you can take care of day-to-day expenses, like rent and utilities. That way, bills get paid on time and in full.
Many industries experience predictable dips in revenue. A business line of credit provides additional working capital to help you make it through a slow cycle.
Many small businesses have taken on additional costs during COVID, like supplying staff with PPE. Others have experienced a decline in business. If your business has been impacted by the novel coronavirus, we can help.
Inventory and supplies need to be purchased on time, so you have the resources needed to conduct business. Cash reserves can be used to fill in short falls, allowing you to buy what you need without delay.
When you’re in a bind and an urgent expense comes up, having a credit line comes in handy. Having a financial safeguard keeps you protected and prepared for anything that comes your way.