business line of credit

What do you need to qualify?
Essential Requirements for Obtaining a Business Line of Credit
Wondering how to apply for a business line of credit? Well, different lenders have various qualifications, so whether or not you qualify can vary based on where you apply. The benefit of applying through Graco Commercial Capital is that you can learn your options through a variety of lenders that we represent with only one application. Banks and credit unions typically have more aggressive and demanding qualifications. If your business doesn't have a spotless financial record, qualifying can be difficult. Even if your application is denied at a bank, you can qualify based on your annual sales.
As for documentation, here is what you will need:
  • Drivers License
  • Business bank statements (last 12 months)
  • Business credit score (and personal credit score)
  • Financial Statements (P&L - last year and YTD)
  • Time in Business
  • Proof of ownership (K1, schedule C, EIN, Certificate of Incorporation, etc.)
  • Business tax returns (last 2 years)
  • Cash flow statement
  • Business plan
Good or Bad credit, we can help you get a line of credit from $50,000 - $50 million plus Interest rates and terms will depend on your credit and income.
How Does a Business Line of Credit Work?
Business lines of credit function like credit cards but with a different structure that's better suited for small business owners. They are also bett for tax purposes - you can write off interest on a credit line but not for a personal credit card.
After qualifying for a business line of credit, you will receive a total credit limit. You can draw as much or as little as you need from that total limit in any number of installments, and you are under no obligation to use the full amount. You can continue to access additional cash as you pay it down instead of paying interest on the full credit limit, you will only pay interest on what you use. Depending on the program, you may have a non-utilization fee and may have to pay for the line if you do not use it. Before signing an agreement, be sure to ask for clear information about any fees. Avoid any agreements without clear, transparent information.
How does a Revolving Line of Credit Work?
Unlike small business loans, revolving lines of credit work by allowing you to continue accessing additiona funds as you pay your balance down and require more cash. In other words, it is a type of loan in which the user can borrow up to their credit again one the debt is repaid. Some business line of credit are revolving, while others aren't. When you discuss the terms of your agreement, be sure to ask questions and confirm whether or not your line of credit is revolving. Revolving line of credit are the fastest and easiest way to access additional cash as your business increases.