Business Lines of Credit
Draw what you need, when you need it, pay for what you use.
A landscaping company in New Jersey buys its mulch, plants and fuel in March and gets paid in June. A staffing agency pays its people every Friday and invoices its clients on net 45. Both are profitable. Both run short of cash on a schedule they can predict to the week. A line of credit exists for exactly this: a standing limit you draw against when the gap opens, repay when the money arrives, and draw again next year.
You pay interest on what is outstanding, not on the limit. An unused line costs little or nothing. We arrange lines from $10,000 to $500,000, through non-bank lenders that decide in a day and through banks that take a few weeks and charge less. Which one suits you comes down to how soon you need the first draw.
How it works
- 1
Approval sets a limit. Nothing is borrowed, and nothing is owed, until you draw.
- 2
Each draw repays on its own short schedule, six to eighteen months, weekly or monthly. As you repay, the limit refills.
- 3
Draws from non-bank lenders land in your account within one business day.
- 4
Lenders review the line every few months. Steady deposits and on time payments push the limit up. Missed payments freeze it.
Where it fits
- ●Seasonal trades: landscaping, retail, tourism, construction, anything that buys months before it sells.
- ●Companies that invoice on terms and must make payroll in the meantime.
- ●Owners who want the reserve in place before the emergency. The best time to arrange a line is when you do not need it.
Where it does not
- ●One large purchase repaid over years. A term loan or equipment financing is cheaper for that.
- ●Businesses already carrying several daily or weekly advances. Line lenders will wait until those are reduced.
- ●Drawing the full limit on day one and leaving it there. That is a term loan with a worse rate.
What it typically costs
Non-bank lines price each draw at a simple fee of 1 to 3 percent per month outstanding, which works out to an annual rate from the high teens into the thirties. Bank lines run at prime plus 1 to 6 percent.
Some lenders add a draw fee of 1 to 2 percent, or a small monthly maintenance fee. Both appear on the offer page.
Enrichment Capital charges you nothing.
Ranges describe offers commonly seen through our network and are not a quote. Every offer we present shows its own amount, cost, term, payment schedule and total repayment before you sign.
Who usually qualifies
- ●Six months in business for a few non-bank lenders, one to two years for most, two or more for banks.
- ●Monthly revenue of $10,000 or more, spread across the month rather than arriving in one lump.
- ●Owner credit of 600 or above for non-bank lines, 680 or above for banks.
- ●A business checking account with three months of history.
Questions owners ask
What is the difference between a line of credit and a term loan?+
A term loan hands you the whole amount at once and you repay it on a fixed schedule. A line gives you a limit to draw from as needed, and you pay only for what is out. Lines suit timing gaps. Term loans suit one time purchases.
Does an unused line of credit cost anything?+
With most non-bank lenders, nothing. A few charge a small monthly maintenance fee whether or not you draw. We say which before you choose.
How fast can I get a business line of credit?+
Non-bank lines are often approved the same business day, with the first draw landing the next. Bank lines take two to four weeks.
Can a line of credit be increased?+
Yes. Lenders review the line every few months and raise limits for businesses that draw, repay on time and show growing deposits.
Do I need collateral for a business line of credit?+
Non-bank lines are generally unsecured with a personal guarantee. Bank lines above $100,000 usually carry a general lien on business assets.
Begin with a conversation
One application, a few minutes, your last three months of statements. A member of our team reads the file personally and tells you where you stand, usually within one business day.
Apply for financing