Business Line of Credit in New York

New York is one of the most competitive states to do business in—2.3 million small businesses make up 99.6% of the total number of New York businesses. Whether you’re located in the heart of NYC, the suburbs of Long Island, or you’re serving customers from Albany to Buffalo, you’ll need to make calculated business decisions to earn a spot amongst your competition and thrive in your industry. 

Cash flow problems are the #1 reason why businesses close their doors for good. If you want to stay competitive, you’ll need to prioritize your cash flow in every stage of your business, but you also need to take advantage of the growth opportunities that come your way as you operate, which are often expensive. If you don’t have the cash on hand to afford the chance at growth, you shouldn’t let the opportunity pass you by. Instead, you should seek out a financing solution that will allow you to grow your business while still operating at the highest level.

There are multiple financing options available to you, but the benefits of each one will depend on your needs and circumstances. Here are a few that you can leverage to support your business’s growth:

• Term Loans
• SBA Loans
• Business Lines of Credit
• Equipment Financing
• Merchant Cash Advances

The lender you’re dealing with will also affect the benefit of your financing. If you can secure favorable terms, then you can grow without restraint, but it’s a bit more difficult if you’re burdened by the terms of your financing, especially in cases where you’ve secured a business line of credit.

Business lines of credit are some of the most flexible financing options out there. Essentially, they’re revolving credit lines that you can draw from whenever you need capital. When you repay the borrowed amount, you can take the same funds again, allowing you to stay one step ahead of the latest challenges.

Searching for a lender to finance your business takes time, which isn’t readily available to business owners and entrepreneurs. Rather than take your attention away from running your business, you can team up with National Business Capital to streamline your search for best-fit financing solutions. 

If you’re faced with a growth opportunity that’s outside of your current capabilities, or you’re having difficulty managing your cash flow as you grow, National can connect you with the right solution within our 75+ lender marketplace. Fill out our digital application today to see your options!

Securing a business line of credit in New York isn’t something you can pull off in a few minutes; You’ll need to put some time, effort, and thought into the process before you can find what you’re looking for.

 1. Understand Your Business Needs

Taking the time to understand the capabilities of your business is one of the most important steps in the process. Ask yourself: “How much capital will I need to borrow” and “how long will it take for me to repay that amount given the financial capabilities of my business” well before you start looking for lenders.

Both of these questions will allow you to look at your business from a critical point of view. You won’t be able to overestimate your projections or underestimate how much you’ll need to borrow by taking these proactive steps, so make sure you set time aside for this review before you start the process.

2. Search for Lenders

Once you understand exactly what your business needs to grow, you can start looking for lenders to finance your operation. You’ll likely visit the bank or credit union you do business with first, but you may find it difficult to qualify with these lending institutions because of their restrictive eligibility requirements.

Banks and credit unions will require you to have a solid credit history, extended time in business, and substantial annual revenue, which prevents many businesses from securing the capital they need to grow. On the other hand, online lenders have looser eligibility requirements compared to traditional lenders, but their financing products will have higher interest rates.

3. Compare Lenders

There is no one-size fits all approach to business financing. Every situation is different, and every business is, too. You’ll need to research lenders and their programs extensively before making a final decision, which can potentially take more time than the search itself. 

Keep track of each lender’s interest rates, repayment terms, and other contract stipulations as you navigate through your search, but also make a note of other clients’ opinions of that lender. Transparency is essential for business financing, and if you sign on to a shady lender, you’ll likely find it difficult to maximize the benefit of your financing.

4. Submit Your Application

After you’ve decided on the lender that’s right for you, you’ll submit your formal application and wait for their decision. This process can be lengthy, depending on the lender you’re doing business with. If you’re worried about not receiving your funds in time, make sure to prioritize finding a lender that offers fast funding.

Remember: It’s not about getting any approval; It’s important to get the right approval for your business needs. Almost any business can find a lender willing to finance them, but it’s more rare that a business will find a lender with terms that meet their needs. Rather than gamble with something as important as your financing, you can team up with National and have our experienced Business Finance Advisors do the heavy lifting for you.

A business line of credit is one of the most flexible financing options available to entrepreneurs in New York. The revolving repayment terms let you make payments on your schedule, and the ability to draw the same funds after you’ve repaid allows you to stay one step ahead of the latest challenge. You can draw physical cash with a business line of credit, too, which is the major difference between this type of financing and a business credit card.

You can use a business line of credit for almost any business expense, including

• Rent
• Payroll
• Launching a new marketing initiative
• Purchasing inventory
• Working capital
• Updating equipment
• Implementing new technological systems

Some entrepreneurs choose to secure business lines of credit on top of other financing products to manage their working capital as they pay off the more sizable loan. The options are endless, especially if you’re savvy when implementing new systems in your business. 

However, business lines of credit carry higher interest rates on average compared to other financing options. You may also have to offer an asset as collateral as a method of securing the financing depending on your financial situation and the lender you’re doing business with, so make sure to speak with your lender about these factors beforehand. 

Some lenders will have contingencies and hidden stipulations in their contracts, with some requiring you to hold a zero balance for a set period of time during your repayment. If you’re unaware of these requirements, you can potentially run into a difficult situation where you’re paying more than you have to on your financing. That’s why transparency is so important when you’re looking for a lender. For the best results? Team up with a marketplace that can offer multiple options for you to choose from.

The interest you’ll pay on your business line of credit will depend on the amount you draw from your entire credit line. In other words, you only pay interest on the amount you take. If you draw $50,000 from your credit line of $150,000, then you only pay interest on the $50,000 you’ve drawn, not on the total amount of the credit line itself. 

Interest rates will vary depending on your business’s financials and the lender you’re doing business with. Business lines of credit can be either secured or unsecured, depending on the collateral requirement. Secured loans are “secured” by your collateral offering, whereas an unsecured loan doesn’t require collateral. Technically, unsecured financing is still secured by your accounts receivable, but for clarity’s sake, associate secured lines of credit with a collateral offering.

A business line of credit won’t fit the needs of every business. Here are a few other common financing options leveraged by entrepreneurs across the country:

1. Term Loans

Term loans are business loans that are given in a one-time lump sum payment that you must repay over the term outlined by your lender. You can secure a term loan for almost any amount, depending on your business’s financials, and use the funds for most business purposes. However, many lenders will require a detailed plan of how you intend to use the borrowed funds before they approve your term loan, so make sure to plan accordingly before starting the process.

Term length

Can be short-term or long-term – less than one year or up to 25 years

Interest rates

Starting at the prime rate to 6%

Ideal for

One-off purchases or investments, when you know exactly how much a project will cost, long-term financing needs

2. SBA Loans

SBA loans are some of the most coveted financing options available to entrepreneurs because of their high borrowing limits and low-interest rates. SBA-sponsored lenders offer their financing products based on strict eligibility requirements, including high credit scores, extended time in business, and substantial annual revenue. If your organization doesn’t meet these criteria, you might find it difficult to qualify for some of the more substantial SBA financing programs, but you might be able to reach approval with a more lenient option, like SBA microloans.

Term length

Can be short-term or long-term – less than one year or up to 25 years

Interest rates

Starting at the prime rate

Ideal for

Borrowers with good credit

3. Equipment Financing

Equipment financing can help you break down a sizable equipment purchase into more manageable monthly payments. Some industries rely on expensive and bulky equipment to perform their responsibilities and serve their customers. While the equipment does make the job easier, the price tag prevents newer businesses and those without hefty cash reserves from competing in their industry, bringing their growth to a screeching halt. Rather than try to manage without the equipment you need, you can secure equipment financing with a transparent lender to take your business to the next level.

Term length

Mostly short-term—12 to 72 months on average—but can be tailored to your needs

Interest rates

Between 2% and 20%

Ideal for

Transforming sizable purchases into more manageable monthly payments

There are no restrictions—use your capital to pursue any opportunity or overcome any challenge! 

Business Growth

Buy new equipment or inventory, hire new staff, or prepare for seasonal changes.

Business Expenses

Get extra working capital to manage payroll, bridge gaps in cash flow, or pay bills.

Business Opportunities

Expand or open a second location, take on more clients, or capitalize on bulk order discounts.

When entrepreneurs are looking to secure the capital they need to grow, they call up the experts at National Business Capital. Our team of experienced Business Finance Advisors leverages a 75+ lender marketplace to find best-fit financing solutions for your business’s challenges, doing the heavy lifting for you all the way. We take the time to learn about you, your business, and the challenges you face to ensure that the deal we’re connecting you with will help you grow and scale fast, rather than just shackling you with any deal. 

With $2 billion recovered on behalf of our clients, 2,000+ 5-star reviews across Trustpilot, and a commitment to “Driving Growth for All,” National Business Capital is uniquely capable of helping YOU secure a business line of credit in New York.

Ready to get started? Complete our digital application and take the first step toward reaching your full potential!