Business Line of Credit
- Flexible access to funds when needed, with interest payments only on the amount drawn.
- Acts as a safety net for emergencies or opportunities, with no obligation to use it.
- Cost-effective financing by paying only for the borrowed amount, saving on interest.
Take advantage of an 85% approval rate - act now!
What is a Business Line of Credit?
A line of credit (LOC) for your business gives you access to a pool of funds to draw from when a business owner needs capital. Unlike a traditional business loan, you have the flexibility to borrow up to a set amount (typically anywhere from $50,000 to $500,000), repaying only the amount you withdraw, with interest.
You can draw on your small business line of credit to handle cash flow gaps, get more working capital, meet payroll, purchase inventory or materials, or address almost any other emergency or opportunity.
Business Line of Credit Details
As Fast As Same Day
7% - 25%
6 Months - 2 Years
$10K - $500K
Line of Credit Pros vs Cons
PROS
Only Pay Interest on the Funds you Draw
Flexible Capital is Available Whenever you need it
Save on Interest by Paying Back Early
CONS
May Require Updated Documents Before Each Draw
Must have 1+ Years Time in Business
No More Than 3 Negative Days in your Bank Account
How does a Business Line of Credit work?
What exactly is a business line of credit?
Simply put, a funder gives you access to a specific amount of financing set by a credit limit, which you can draw from whenever your business needs the funds. It allows access to capital at your fingertips when you need it. First, log into your small business line of credit assigned portal, then click and draw funds, it is that easy!
However, you don’t make payments or incur any interest until you actually tap into those funds and draw them. You only pay for what you use, therefore you are only charged interest while using the funds. If you pay the borrowed money back early, you can save drastically on the interest with early pre-payment discounts.
Business lines of credit can come secured—backed by collateral like inventory, accounts receivable, and so on—or unsecured, backed only by your personal guarantee. In some cases, a line of credit funder will file a UCC against the business while you are using the funds. Read more below to find out how to get a business line of credit.
An Example of a Line of Credit
This sort of financing often gets referred to as “revolving” credit because you can tap into your credit limit over and over again. And when you repay what you’ve spent, you can continue to draw capital from your line of credit. Therefore, you will have access to funds in the future when needed. The best line of credit funders will increase the credit limit as you build payment history with that funder.
For instance, say you’re given access to a $50K small business line of credit for your retail business.
Now you only need $30k to purchase some inventory for your business, so you draw out the $30k, keeping the other $20K in the pool of available funds.
Once you pay back the $30K borrowed plus interest, you’ll have the full $50K again at your fingertips, without having to go through the application process and apply for another loan. You have the flexibility to pull on that $20K anytime needed in the future. Each draw is considered separate and treated as its own separate payment schedule.
Pay Back Early for Interest Savings
Remember you are only charged interest as you are using the funds, so you are also eligible for huge savings on interest, for paying the line of credit back early. At each draw, you will get an amortization schedule, which will show you the cost of the funds you draw, over the course of each month of the term. Many business owners use it for short-term bridge capital when an opportunity or something unexpected arises.
For Example: Let’s say you have a 12-month term, which comes in a 12% interest rate. For simplicity purposes, each month the funder is charging you 1% for using the money. If you pay the line of credit off within just 3 months, you will not end up paying the full interest and would pay 3% for using the funds for 3 months.
The time and energy you save are some of the biggest benefits. You will have access to your Upwise business credit line whenever you need financing in the future. Your credit limit can be increased based on payment history and underwriting evaluation.
Who Qualifies for a Business Line of Credit?
A business line of credit is based on the monthly revenue and business owners credit score. Newer, less established businesses might be able to qualify, even with a short time in business. Medium-term lines of credit are more for businesses with good credit and a solid financial history. To qualify with Upwise, you only need 4 months of business history. If you are looking for a larger dollar amount, please ask one of our funding specialists about adding collateral or securing the line of credit with invoices or account receivables.
The maximum credit limit amount, introductory term of the credit line, and repayment terms depend on your business’s revenues, credit rating, tradeline history, time in business, and other factors. See below the business line of credit requirements.
Business Line of Credit Requirements
positive payments
over $175K
over 600+
1+ years
* Note: These business credit lines requirements are based on previous Upwise customers and is just an average.
Open the Door to Financial Freedom: Access a Business Line of Credit.
What does a Business Line of Credit cost?
The basic cost of a small business line of credit is completely straightforward. Simply put, if you draw from the line, then you pay back the amount drawn plus interest. The interest rate is charged on a monthly basis, so whatever your balance is at the end of the month, that is what you’ll be charged interest on. People always ask, what are the business line of credit rates? The business line of credit rates can vary based on whether the credit line is a secured line of credit or an unsecured line of credit. Typically, both are based on your personal credit score and average monthly revenue so the rates may vary.
An Example of Withdrawing Funds & Paying It Back
Let’s say a construction company receives a large job and does not have the funds to purchase materials for the upcoming job and cover payroll. The owner calculates that he needs $50k to cover the material for the new large job and payroll.
For this example, let’s say that a $50k cushion would prevent issues like this from happening in the future. As the business owner, you know your construction job will be paid within 90 days.
So you reach out to Upwise Capital and apply to open a small business line of credit of up to $100K.
Next time you need to purchase materials for a new large job and cover payroll, you can draw funds to cover your expenses. You will have access to the $100k business line of credit anytime you need it in the future. If you pull out $50k for materials and cover payroll, then pay the funds back within 90 days when you get paid from your customer, you will only be charged interest while you are using the funds. The Upwise business line credit offers flexibility and peace of mind, that funds will be available in case you need them in the future or today.
Apply for a Business Line of Credit Now.
- Access a pool of funds to draw from as needed.
- Maintain financial flexibility wih this instant revolving line of credit
- Get started by filling out quick form with your basic info.
Stay ahead of the curve - get access today!
Documents You'll Need to Apply
Driver’s License
Voided Business Check
Business Bank Statements (Last 4 Months)
Credit Score
You may also be requested to provide the following for larger dollar amounts over $100K:
Balance Sheet
Profit & Loss Statements
Business Tax Returns
Personal Tax Returns
In the realm of small business ownership, unforeseen obstacles are bound to arise, regardless of your level of preparation. The capacity to adapt quickly and discover prompt solutions can be the decisive factor in thriving and outperforming your competitors. When time is of the essence, our unsecured business line delivers a swift response, granting you access to draw on the necessary funds in as little as 24 hours.
Unlike restrictive credit unions, business credit cards, or online lenders with limited options, our credit business lines provide flexible financing tailored to your operational needs. Don’t allow time and opportunities to slip through your fingers – take action now to secure the financial backing that will sustain your business’s prosperity.
Why Upwise for a Business Line of Credit
Quick & easy application
Our simple 15-minute application gets you on your way to funding quickly. Most applicants receive a fast decision within hours of applying. Then just choose your loan terms and you could have funds deposited into your account as soon as 24 hours.
Ensure you make the wise choice
Every Upwise applicant gets a dedicated funding advisor who takes the time to understand your business and it's unique needs. We are here for your support throughout the entire funding process.
Access multiple financing options
Upwise has an extensive product suite and a network of business line of credit lenders. This means you're more likely to find the best match for your funding needs.
