Line of Credit
A Business Line of Credit is a determined credit limit that is extended to the borrower.
Business owners can benefit from purchasing a credit line as it gives them access to a stream of capital to help with cash flow, operational expenses, and additional costs that come with running a business. There are different kinds of Credit Lines that business owners can acquire.
Funding Criteria
Fico Score
Funding Amount
Term Length
Time in Business
Time to Fund
600+
$ 3,000 - $ 500,000
4 - 18 months
4 Months +
As Little as 24 Hours
Advantages of Credit Line
There are many advantages to obtaining a Credit Line. Usually, they depend from a type of a Credit Line. With fundu, you can choose the most suitable option for your business - Revolving or Non-Revolving Credit Line, Secured or Unsecured Credit Line.
Business Credit Lines are good for flexible funding needs, and for businesses that experience known cash flow fluctuations due to seasonality or contract based earnings. If you operate a business that doesn't have a steady stream of revenue you may want to consider purchasing a Business Line of Credit.
Secured Line of Credit
The Line of Credit is "Secured" by your assets. Collateral is required to be eligible for a Secured Line of Credit. The benefit of offering up collateral for this type of credit line is the lower interest rate, more agreeable terms, and higher account limits.
Unsecured Line of Credit
Unsecured Lines of Credit afford you higher amounts and do not require any collateral. The product does include additional costs, shorter terms, and potentially higher interest rates.
Revolving Line of Credit
You can take funds from the credit account which will be considered against your balance as frequently as you desire, but permitted up to a defined limit. Monthly payments are required after borrowing from your line to payback the account balance. You are still able to borrow additional funds with an outstanding balance as long as you have not met the limit. Individual withdrawals have the same loan terms and is treated as a singular loan.
Non-Revolving Line of Credit
Unlike Revolving Credit Lines, every time you borrow from a Non-Revolving Line of Credit the transaction is considered as an independent loan with separate terms. The Line of Credit will have specific terms regarding replenishment included in the contract. The credit available to you may not replenish even after paying your existing balance. You should read the agreement terms carefully, and consider a Revolving Line of Credit if you want access to borrow more than the allotted credit line.
How does it work?
1
The lender either automatically discounts a fixed percentage of each credit card sale when it’s settled, or receives an ACH from your bank account for a fixed rate
2
In exchange, you receive a lump sum of working capital
3
Collection stops automatically when the full amount is repaid