What is the best line of credit for small businesses?

You should consider a credit for small businesses when you need to buy assets that will help increase your revenue.

Often, paying upfront for expensive items such as vehicles, machinery and equipment can put a strain on your capital.

Therefore, a loan can be an excellent alternative.

In addition, this type of credit can be used to obtain cash to manage cash flow.

If your company sells on credit and customers take 30 days or more to pay, this is a good alternative.

This way, you pay expenses on time while waiting for customers to settle their accounts.

A credit for small businesses can also help you expand your business more quickly.

You can hire more employees in order to increase production due to increased demand or expand the services you offer in order to serve a growing market.

In addition, this type of credit serves to build up a credit history for your company.

When you take out a line of credit and use it responsibly, it helps to establish an excellent credit history.

In this sense, you may be able to obtain larger loans at better rates in the future.

So read on to find out about the best credit options for small businesses.

Lendio

This is a free online loan marketplace from the USA, aimed exclusively at small business owners.

The company has already financed US$15,000,000,000 and has more than 75 lenders in its network.

Among the advantages offered is the simplicity of the application process.

Basically, you have to fill in the form in just a few seconds, with no impact on your credit.

One of the financing managers will then contact you to understand your business needs.

The next step is comparison, so you’ll see what each lender is willing to offer you in the form of credit for small businesses.

Finally, all you have to do is choose the offer you prefer, sign up and receive capital for your business in just 24 hours.

Financing options 

In addition to the simplified application process, the company has several financing alternatives, starting with accounts receivable financing.

Basically, you can get quick access to cash by selling your purchase orders or accounts receivable in order to get back to business as usual.

Once contracted, you have access to the funds within 24 hours and pay fees of 3%.

Secondly, we can talk about another option for credit for small businesses, the business line of credit.

This modality allows you to obtain a revolving amount of funds to borrow when you need it and pay it back later.

The amounts range from US$1,000 to US$500,000.

You receive the amount within one or two days and pay rates of 8% to 60%.

Another alternative is the SBA loan, where you can get up to $5 million.

The speed of the funds is between 1 and 3 months.

Short-term loans are used to cover unexpected costs and finance a small project.

You can also survive a crisis or capitalize on a new business opportunity.

In this sense, get the amount from US$2.5 thousand to US$500 thousand.

Receive the amount within 24 hours and enjoy an interest rate of 8%.

Likewise, the commercial term loan gives you access to a fixed amount that is repaid at regular intervals over a certain period.

The amounts range from US$5,000 to US$2 million.

You have access to the amount within 24 hours and pay a fee of 6%.

More Lendio credit for small businesses options

It’s also worth talking about the business cash advance alternative.

Basically, you have quick access to the funds because they are available within 24 hours.

As the name suggests, you borrow the money that your company will earn in the future.

This borrowed money is then repaid at a fixed daily percentage.

So get from US$5,000 to US$1 million and pay rates of 18%.

Equipment financing is used to purchase machinery and other items for your company.

There are financing alternatives for almost all sectors and any variety of items you need.

The amount is between US$5,000 and US$5 million and is available within 24 hours at a rate of 7.5%.

On the other hand, commercial mortgages, an alternative to credit for small businesses, can be used to buy, build, expand, renovate or refinance your business.

The speed of the funds is between 1 and 3 months, with a rate of 4.5% and an amount of between 5,000 and 5 million dollars.

There is also a start-up loan that maintains your equity while allowing you to access the working capital your start-up needs to grow.

The amount is US$150,000, with a funding speed of 2 to 4 weeks and a rate of 31%.

Final options

As for the business acquisition loan, you have between $5,000 and $5 million to buy an existing company or franchise.

In other words, the company gives you the financial resources you need to take advantage of business opportunities, even though you don’t have the capital to buy it outright.

The speed of the funds is 30 days, with a rate of 5.5%.

Finally, to round off the credit for small businesses options, there’s the business credit card which helps you control your business expenses.

The card is also used to increase working capital and build a strong business credit history.

The amount is US$150,000, at a rate of 31%.

So, to find out more about all the alternatives and finally apply for your credit, visit the company’s website.

Clarify Capital

According to the website, this is not your typical credit for businesses.

Clarify Capital believes deeply in the ambition of small businesses, so its core values are not just words on the wall.

Among the values, we can mention the simple and transparent process.

It’s also worth noting that financing is done quickly and payment is flexible.

That way, all you have to do is apply online (which only takes 2 minutes) or speak directly to an agent on the phone to get access to the money your company needs.

Another interesting point is privacy.

Clarify Capital, which offers credit for small businesses, is committed to guaranteeing the security of all your data.

With regard to the credit itself, understand that no collateral is required to obtain the financing.

The amount is up to US%5 million, and you can have it within 24 hours.

The rate is 6%, and it’s worth mentioning that the interest paid is tax-deductible.

In other words, the cost is reduced and you can achieve your goals sooner.

And there’s a dedicated financial advisor, so you can ask any questions you may have.

This advisor even takes care of all the paperwork so that you receive the money quickly.

Also, remember that once you have enough money to continue your business, you keep all the equity.

As a result, with a credit small businesses, you will continue to make all the decisions.

Finally, be aware that there are different credit options, depending on your business objectives.

There are term loans, lines of credit and equipment financing, which we’ll cover next:

Types of loan

First, let’s talk about unsecured business loan alternatives.

Generally speaking, this type of loan doesn’t require you to put up any collateral.

In other words, you can take out the loan without running the risk of offering personal or business assets.

Despite this, it is essential that you remain vigilant because lenders approve unsecured loans based on your creditworthiness and other factors related to your business.

It’s worth noting that the requirements for credit for small businesses are generally easier to meet for new companies with no credit history.

It also serves as an excellent alternative for companies that have a good credit history and pay their bills on time.

However, if you need large amounts of money, this may not be the best alternative.

In addition, these loans have shorter repayment periods, so you need to be sure you can afford the monthly payments.

Check out the unsecured loan alternatives below:

Short-term commercial loans for small businesses usually have a term of up to 2 years.

These lump sum loans or commercial term loans are repaid through fixed, regular monthly payments that include interest and fees. 

On the other hand, it’s worth talking about the business line of credit.

Through this alternative, you have access to funds that work in the same way as a credit card.

So you receive a certain amount of funds as a limit, while paying interest on the amount borrowed.

As with paying a bill, when you return the money used, the account is replenished.

More options for unsecured credit for small businesses

You can then withdraw the funds again as needed.

Working capital loans are for those who need extra cash to cover their day-to-day operations.

This type of loan is also called “business operating capital”.

In this sense, the money can be used for inventory, transportation expenses, salaries and rent.

You can also apply for a business cash advance.

In other words, you receive your future income quickly and pay it back with the addition of fees.

It is available to companies that accept credit card payments or other receivables via a business account.

Secured commercial loans

Unlike the alternatives mentioned above, the ones we’ll cover next require borrowers to provide collateral for the amount they wish to borrow.

Note that the risk is distributed between the lender and the borrower, so that the conditions can be more attractive.

Among the conditions of this credit for small businesses, we can mention the lower rates than unsecured loans.

You also have access to larger amounts of capital.

However, you should be careful because the lender can repossess the collateral if the debt is not repaid.

You may also face a longer approval process because the lender needs to verify the collateral.

Here are 4 alternatives, starting with the SBA loans offered by a federal agency that provides capital through business loans and grants to small businesses.

Since the loans are partially guaranteed, if a company defaults, the government pays the lender the guaranteed amount.

The SBA guarantees up to 85% of loans worth $150,000 and 75% of larger loans. 

Since the SBA administers different credit programs for small businesses, we’ll mention the most popular ones below:

Paycheck Protection Program (PPP), SBA disaster assistance and microloans.

More guaranteed business credit options

Another alternative that should be presented to you would be equipment financing.

This is an economical and low-risk way for companies to buy assets.

This is because you can buy machinery without paying all the money at the time.

It’s interesting because the asset serves as collateral for the loan, so the risks are reduced.

However, be aware that your company could lose the equipment through repossession.

This happens especially when a business owner fails to pay the installments of the credit for small businesses.

So if you keep up with your payments, you won’t have any problems.

Invoice financing, on the other hand, is aimed at companies that sell goods or services on credit to many customers.

In this sense, you can turn accounts receivable into cash immediately.

The invoices themselves act as collateral for the credit.

When the customer pays, the lender takes the agreed percentage of the invoice value to cover the costs of the loan and returns the rest to the company.

Finally, it’s worth introducing you to invoice factoring, a method in which you sell your outstanding invoices to a creditor.

As a result, you have the money immediately, and the factoring company manages the accounts receivable.

This means that your customers pay the factoring company directly.

There are two types of factoring: with resources and without resources.

In the first type of credit for small businesses, any unpaid invoices are your responsibility. 

You are obliged to buy them back or replace them with a current receivable. 

In the second type (non-recourse), the risk falls on the creditor if you fail to pay the debt.

Minimum requirements 

To obtain one of the credit alternatives offered by Clarify Capital, it is essential that you have a monthly income of at least US$10,000 per month.

This means that the money must be received in a business bank account.

The business bank account is also essential because the company’s consultant needs 3 months of your bank statements to verify your income.

And although you can be approved with any score, it’s interesting to have more than 500.

In fact, the higher your credit rating, the better the conditions.

Another essential point is that you have been on the market for more than 6 months.

This is important because it shows lenders that their business model is sustainable.

For more details, be sure to visit the company’s website.

Credit for small businesses – Wells Fargo

This is a publicly traded company in the USA that provides financial services.

For companies looking for traditional banking services, this is one of the main alternatives.

Next, we’ll introduce you to unsecured credit lines:

BusinessLine caters for customers who have been in business for two years or more.

For new clients of this institution, there is no annual fee for the first year and the amounts are between US$10,000 and US$150,000.

There are also low Prime+ rates (1.75%) and automatic enrollment in a free rewards program.

Secondly, we should talk about the credit for small businesses Advantage option.

This is especially suitable for customers who have been in business for less than two years.

There is no annual fee and the actors are from US$5,000 to US$50,000.

Rates as low as Prime+ 4.50% and automatic enrollment in the rewards program are other advantages.

Therefore, consider some factors to prepare yourself in the best way and be approved for the unsecured line of credit:

• Generally, guarantors have a FICO score of at least 680 at the time of application;
• A BusinessLine credit line account requires personal guarantees from any owner with 25% or more ownership in the applying business, with a combined minimum aggregate of 51% ownership;
• A Small Business Advantage account requires personal guarantees from any owner with 20% or more ownership in the applicant’s business, with a minimum combined aggregate of 51% ownership.

Credit for small businesses Wells Fargo Prime

This alternative is generally available to companies with annual sales of between US$2 and 10 million.

This way, you can get from US$100,000 to US$1,000,000, with a competitive origination fee of 0.50% of the value of the line, due at account opening and annual renewal.

Finally, the modality is protected by business assets.

For more details, be sure to visit the website.

SBG Financing

SBG Financing is a leader in financing the growth of small businesses.

As such, it is focused on providing the most flexible and fastest financing options.

As a result, once you’ve completed your application and been approved, you’ll receive the funds in your account within 24 hours.

It’s also worth mentioning that credit for small businesses approvals are customized to your business needs.

On the other hand, save money by finding the right program with the lowest rates for your business.

Also, understand that you have an excellent repayment period, ranging from 6 months to 7 years.

This means you can get money urgently and pay it back at the best time for your company.

Rates start at 1.75% per month, and you can apply for up to US$10,000,000.

Another great advantage is that you can choose to pay fortnightly or monthly.

No prepayment penalties and same-day financing are also some of the benefits.

Other credit options for small businesses

The business credit line has revolving terms of 6 to 24 months with rates starting at 1% per month.

As well as same-day financing, there are no prepayment penalties and eligibility to increase the line is every 60 days.

Equipment financing has a term of between 1 and 10 years, with rates starting at 3.75%.

You can pay up to 100% of the value of the equipment, with no prepayment penalty.

Finally, financing is done within 48 hours.

The application process is simple:

Just answer the questions to apply online, wait for the company’s approval and receive the funds after accepting the terms.

So be sure to check out more information about credit for small businesses on the website.

Conclusion

To conclude, we should give you the following tip:

When considering a loan for small businesses, determine your business goals and the loan option that can help you achieve those goals.

Don’t take out a loan without knowing the main alternatives or understanding how to invest the funds.

Otherwise, you’ll have access to good money, but you won’t have the necessary planning to use it, which can result in various problems such as debts.