What is an Unsecured Business Line of Credit?

The stress of putting up your personal and business assets as collateral in order to get the funding you need to grow your company can be crushing. Fortunately, unsecured business lines of credit make it possible to get the financing you need, while protecting your assets with no collateral requirements!

More Good News:

There’s plenty of alternative financing options that don’t require collateral at all. One of the fastest and most convenient funding examples is an unsecured business line of credit. With no collateral requirements, you don’t have to risk losing your car, home or business. And with the added convenience of flexible terms, low rates, and huge amounts, unsecured financing through NBC is the perfect option for business owners with open-ended funding needs.

What is an Unsecured Business Line of Credit?

Similar to an unsecured small business loan, an unsecured business line of credit is a financing option that is not backed by any kind of collateral. A business line of credit generally works pretty similar to that of a typical loan, in that a predetermined amount of money is given to a client, which they pay back to a lender over an agreed amount of time along with a small amount of interest.

However, this is where the similarities between an unsecured line of credit and a loan end. Unlike an unsecured small business loan, in which the borrower repays a set amount in relation to the total amount of capital borrowed, with a business line of credit, clients only pay for what they use.

Unsecured Credit Line Qualifications

  • No Credit Score Restrictions: Through an alternative lender like NBC, a wider range of credit scores are approved, due to their greater variety of credit line products, and their simplified qualification standards that are tailored for small business acceptance.
  • 100k in Annual Gross Sales: You don’t need to be a multi-billion dollar corporation to apply for an unsecured line of credit. Your business just needs to generate at least $100k a year in total to qualify.
  • 6+ Months in Business: That’s right. NBC offers unsecured small business loans of all kinds, as well as those that aren’t technically “loans” at all such as business lines of credit to any and all businesses, from the very newest, to the oldest.

What Do You Use a Business Line of Credit For?

When small business owners are seeking funds for their businesses, they usually require the money as quickly as possible. Small business owners who seek to use an unsecured business line of credit and unsecured business loans do so for a variety of reasons, including:

  • Hiring more more staff
  • Replacing or upgrading a key piece of equipment
  • Expanding or relocating your building
  • Make spontaneous and ongoing purchases to take advantage of unexpected opportunities
  • Resolve issues in cash flow due to seasonal dips in sales or slow customer payments (this is especially useful for manufacturers, distributors, retailers and even medical/healthcare and dental practices).
  • Or if your firm has outgrown its startup location and is in desperate need of new headquarters.

How an Unsecured Business Credit Line Works

To best illustrate the process, here’s an example scenario of a business owner using an unsecured business LOC:

  • A business owner receives a line of credit with a typically high capital limit.
  • They can draw however much they want from the total amount of capital, which through NBC typically caps off anywhere between $10,000 and $5mil.
  • You can draw from this line of capital whenever they want, and as often as they want.
  • Once you take out a certain amount of capital from your unsecured credit line, you only have to repay the capital you owe for that exact amount. For example, if you have a $100,000 credit maximum, and you take out $10,000, you are only obligated to pay back the $10,000 for your payment cycle. This is a key differentiator between an unsecured small business loan and an unsecured business credit line.
  • Once a borrower repays the amount they took out, this amount is immediately added back into their business line of credit, and so becomes available to withdraw again. To follow the above example, once the borrower takes out $10,000 from their $100,000 credit line, $90,000 is left for the borrower to draw from. Once the $10,000 is repaid, it will be automatically be added back into the line of credit, restoring the borrowers full balance of $100,000.

How Long Does it Take to Get an Unsecured Business Line of Credit?

In as little as 24 hours, through NBC’s expedited and simplified approval process. Simply fill out our 1-minute application to get started, or give our Business Financing Advisors a call at (877) 482-3008 to learn all you need to know about securing an unsecured business line of credit and unsecured business finance.

Risk Assessment of Unsecured Business Financing

This is a precarious loan for the lender, but a low-risk one for the borrower. National Business Capital seeks to establish long-term financial relationships with each of our clients. We know that to stay in business you must grow your business. And that tomorrow’s success is founded on today’s financial business relationships you can depend on for funding whenever you need to take your enterprise to the next competitive level.

National Business Capital’s business lines of credit are flexible, fast and dependable. If your business could benefit from an unsecured business line of credit, know that we can not only provide the funding you require, but also provide sound and professional business advice you can depend on based on years of experience and millions of dollars lent to small businesses just like yours.

About the Author, David Surrusco
David Surrusco is the Head Content Writer at National Business Capital, is best known for his work in creating what has become the best business financing blog known to mankind: The NBC Advisor.