What sorts of businesses are eligible for this flexible financing?
Who Qualifies for Business Lines of Credit?
What sorts of businesses are eligible for this flexible financing?
Younger, less established businesses might be able to qualify for short-term lines of credit,
while medium-term lines of credit are more for businesses with good credit and a solid financial history.
The maximum amount of funding available, introductory duration of the credit line, and repayment terms
depend on your business’s revenues, credit rating, history, and other factors.
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So what sets a business line of credit apart from a traditional term loan?
To start with, business lines of credit usually come with lower interest rates and closing costs
than traditional term loans of similar sizes. But on the other hand, if you’re late with a payment or go over
your credit limit, that interest rate could spike pretty high.
Also, traditional term loans have regular interest
rates over the life of the loan, which is a major difference between term loans and business lines of credit.
Why do we split business lines of credit up into short-term and medium-term?
Although small business lines of credit don’t really have term lengths—you can withdraw and pay back those
funds indefinitely, as long as your lender believes that you’re a responsible borrower—these labels help you
compare short-term loans with short-term lines of credit and traditional term (or “medium-term”) loans with
medium-term lines of credit.
Who Qualifies for
Business Lines of Credit?
What sorts of businesses are
eligible for this flexible financing?