These days, anyone who owns a business wants a true revolving business line of credit more than any other funding option.
But what is a “true revolving” business line of credit, and what makes it better than “normal” small business loans and business credit lines? Read on to find out!
Here are the 9 most common reasons why more business owners are choosing revolving credit lines over any other funding options:
A revolving business line of credit is an unsecured type of credit line that allows for business owners to draw only the amount of capital they need at a time, which they can then replace back into the total of their credit line, where it becomes immediately available to draw from once again.
This “revolving” nature this type of business LOC from “normal” business lines of credit and business loans. They are also unique in that they require no collateral to be leveraged.
Although somewhat harder to obtain than other funding options due to no collateral requirements, business owners often benefit from a lower cost of capital, greater control over the funds they use, and flexibility to draw funds as needed to prepare for any business challenge or opportunity.
You can either get a business line of credit through a traditional bank, or through alternative options like us.
Banks, however, typically don’t like to offer revolving business lines of credit, as they see unsecured credit lines controlled entirely by business owners as a riskier move than other funding options.
This often results in collateral leveraging, high FICO and time in business requirements, high interest rates, and slow processing speeds.
Fortunately, financing companies like us specialize in providing business owners with true revolving business lines of credit with never any collateral needed, only 6 months in business and 650 FICO requirements, and an expedited, safer funding process for 90% of all business owners who apply.
When comparing credit lines from lenders, you may have come across two different types: secured and unsecured. The main difference between the two is whether or not collateral is required. Some lenders put a lien on your assets to secure the credit line, meaning you could lose those assets if you find yourself unable to pay back what you draw out.
Many lenders look at unsecured loans as liabilities and are therefore wary to extend this type of credit. Alternative lenders have less stringent qualification requirements, allowing businesses with low credit scores and short operating histories to access credit lines without worrying about the possibility of losing their assets. Since you don’t have to put up any collateral for the unsecured lines of credit from National, this structure is less risky for you as a business owner.
If you have a lower credit score or operate a business in a “high-risk” industry, you may not be able to qualify for a line of credit, or the desired amount. Qualifying businesses tend to have lower limits, and pay more in interest on the money they borrow.
National Business Capital and Services works with merchants across industries. We look at factors beyond credit scores to determine credit limits, terms and rates. With a truly revolving line of credit, you can borrow exactly what you need up to your credit limit, and know the funds will always be there to help cover expenses.
So if you think a revolving credit line would be the best type of funding option for your business, give us a call at (877) 482-3008 apply by filling out our 1-minute application online.
Through our exclusive connections to over 75+ specialized lenders, we’ll ensure we find the best revolving credit line in the global marketplace for your business.
National Business Capital is the #1 FinTech marketplace offering small business loans and services. Harnessing the power of smart technology and even smarter people, we’ve streamlined the approval process to secure over $1 billion in financing for small business owners to date.
Our expert Business Financing Advisors work within our 75+ Lender Marketplace in real time to give you easy access to the best low-interest SBA loans, short and long-term loans and business lines of credit, as well as a full suite of revenue-driving business services.
We strengthen local communities one small business loan at a time. For every deal we fund, we donate 10 meals to Feeding America!
Matt Carrigan is the Content Writer at National Business Capital & Services. He loves spending every day creating content to educate business owners across every industry about business growth strategies, and how they can access the funding they need!