When you need funding to grow your business, you have several possible options. A
business line of credit is one of the most flexible, because you borrow only what you
need, when you need it.
How does a business line of credit work?
Business credit lines are a popular financing option for small and medium-sized
companies. Your lender approves a maximum amount, and you draw funds as needed, paying
interest only on what you use.
This arrangement, known as a revolving line of credit, lets you borrow again as you
repay. Businesses with strong revenue and good credit can typically qualify for the best
terms.
How can I choose the best line of credit for my business?
These are some questions to ask when evaluating a commercial line of credit:
Is there a convenient online application?
A simple process saves your team time.
Can I get preapproved without a hard credit check?
Too many hard inquiries can lower your score.
What are the qualifications for approval?
Make sure your company can meet them before you apply.
How long will approval take?
Know when funds will be available.
What interest rate can I expect?
Ask whether the rate is fixed or variable.
How much credit can I access?
Credit lines range widely based on your business.
What fees are involved?
Ask about origination, annual and draw fees.
How will the lender deliver the funds?
Transfers, checks or a linked card.
Local lending, with people who know you
Haven is committed to the businesses in our communities. Our business lending team can
help you compare a line of credit with other options, like an SBA loan or equipment
financing, and choose what fits.
Image credit: Teerasak Ladnongkhun via Shutterstock