Business Line of Credit in Florida

What Is a Typical Business Line of Credit?

A business line of credit is structured as an open revolving credit facility. This type of funding allows companies to borrow and draw funds when needed on-demand or make purchases or pay expenses. In addition, lines of credit charge principal and interest. Business lines of credit have a limit that cannot be exceeded without a lender’s approval and is not open-ended forever and requires renewal by lenders either semi-annually or annually to be extended.

The primary reason customers are interested in lines of credit instead of term loans is the advantage of a draw feature, affordable rates, and flexible repayment intervals that are viewed as a great benefit. Although it is not a loan, credit lines are popular with companies that need working capital and a fast way to borrow funds.

What’s the Difference/Benefit Between a Business Line of Credit and Business Loans?

A credit line is essentially an account that you’re able to draw money from and pay back only what you take out, like a credit card, because it’s revolving, you’re able to do reenact this cycle as many times as your lender allows (if you’re paying it back). Loans typically have a fixed repayment term. With loans, you have to determine upfront how much you will need as you will not have the ability to draw capital after consummation. Loans are fixed terms and not flexible.

Lines of Credit Product Features

• Credit limits from $10,000 to $500,000 (larger lines may be available case by case)
• Renewal terms from annually to every 18 months
• No origination fee, only draw fees that range from 1.99%-2.99%
• Low $5,000 minimum draw amount
• Competitive rates begin below 1% a month — fixed rates, not variable rates.

Credit lines are like a “credit card” for your business but with more benefits and competitive rates. Below outlines further detail:

Have peace of mind knowing there is a fixed maximum cost on every drawn amount, just by making your minimum payments. Interest is not compound interest like credit cards.

Get more flexibility to purchase equipment, fulfill vendor bills, make payroll, and manage other cash-strapped activities that credit cards cannot handle without having to make a cash advance.

Pre-Pay and Save With No Penalty or Fee

You can also pre-pay and save with no penalty or a fee. Not only does this reduce your cost, but it restores your available fixed amount to pull cash, not credit.

How Do I Get a Business Line of Credit for My Business?

Is It Easy to Get a Business Line of Credit?

Fast

  • Quick and easy application submission process with decisions same day
  • Only application and bank statements needed for pre-qualification (easier than a bank, that’s for sure)
  • Same-business-day decision and next-business-day funding
  • Seamless online app activation process
  • No site visit required

Flexible

  • Repay early with no penalties
  • True revolving lines of credit – each payment replenishes available financing.
  • Access to borrow and draw as much as you want whenever you want using an online banking portal or mobile app

Affordable

  • No origination fee or maintenance cost
  • Only pay for the funds you access from your account for how long they are used. Accrued daily based on the outstanding balance.
  • Every new draw gets an additional term to make all payments.

Most Common Business Needs and Uses of Credit Lines

• Working capital
• Paying vendors\
• Make payroll
• Cash flow
• Expenses
• Expand operations
• Purchase equipment
• Address repairs
• Fulfill cash-strapped activities
• Instant access to money on demand
• Funds Increased inventory
• Hire employees
• Financing needs for emergency short term cash flow issues

Why Should I Choose a Small Business Credit Line?

The best answer is that it’s flexible!

Most established businesses need capital and want business lines of credit since there is a lot of flexibility in withdrawing the money for business needs. The only difference is a business owner can use it as they need it and only pay interest on the balance owed, meaning they don’t have to pay interest on a balance that they didn’t need at the time.

This is a great product, like a credit card as well, for quick use of money and a fast return on the investment of the capital. In fact, these are commonly used by manufacturers, contractors, and many other businesses that use the money for a range of needs and benefits. They will invest their borrowed money into purchasing products that will then be sold at a profit within a short time, which is better suited than small business loans or short-term loans.

Online banking financing options still have more traditional methods. They typically have the most demanding standards and qualifications as well with loans or a business credit card due to banking regulators. Overdraft protection will be required for your business bank account as well.

Online banking institutions have business lines, but security reasons and other underwritings will benefit cash flow from the bank account, reducing your credit limit periodically. So be sure to ask if this feature applies to your company. With a bank, expect a strict application process that can take up to 30 hours to complete, and with banking lengthy approval or denial time, you might not know if you are approved for the product for up to 30 days, and even then you will have to wait to have access to the cash.

Depending on what you need the financing for and the time frame, this could be a great financing option for your company. However, certain needs and uses for businesses are unsuitable for this product and may be better suited for other financing options, loans, and programs. There may be a better financial product available that you might be interested in when it comes time to borrow.

FAQ and More Information About a Business Line of Credit

How Do I Pay Back What I Borrow?

It’s simple! If you have a limit of $100,000, and you only draw $20,000 — you only need to pay back what you’ve drawn out. The remaining $80,000 is remaining cash there if you need it in the future, but you don’t need to make payments on money you haven’t taken out.

What Can I Use a Business Credit Line For?

You can use this product for nearly any business expense you need, whether it’s billing, managing cash flow, unexpected expenses, new inventory, or equipment purchases. LOC offers more benefits than typical loans.

What Is the Difference Between a Secured and Unsecured Line of Credit?

Secured means that the business line is secured with collateral such as property or a personal guarantee. An unsecured line does not require certain types of collateral but may or may not have a personal guarantee. Businesses should expect higher costs and lower credit limits without collateral or guarantees for unsecured lines of credit. The best rates and terms require security to borrow.

Which Banks Offer a Business Line of Credit?

Not all local banks prioritize providing business credit lines and other loan options as it’s a high-risk enterprise. Most local banks will require you to maintain a business bank account with overdraft protection to apply for a credit line. Many just offer credit cards or have strict guidelines. You will have to check around if you wish to use a bank to find out who is best. However, you can always rely on alternative lenders or your local bank or credit union if need be.

What Kinds of Financial Institutions Will Offer Business Lines of Credit?

  • Retail Federal & State Banks
  • Credit Unions
  • FinTech Companies
  • Brokers
  • Business lenders
  • Retail Online Banking

What Do Lenders Look At When Qualifying a Business for Lines of Credit?

  • Business credit record (tax identification number)
  • Personal credit
  • Bank statements (cash flow)
  • Collateral (not required)
  • Profit and loss (not always needed)
  • Business website
  • Debts and expenses
  • Real estate as collateral (rare circumstances, typically not required)

What Is the Most Common Reason Owners Use a Business Line of Credit?

Working Capital is the best use for Business Line because of the product’s flexibility and the ability to access funds on demand.

Is Any Real Estate Required for Collateral for a Credit Line for My Business?

The short answer is no. Real estate is generally not required in most cases. However, real estate can help secure financing that otherwise would not lead to approval and the ability to borrow.

How Do I Get a Quote and Loan Offers?

You can get more information and a quote by filling out our super easy and convenient quote form on our website and get started today by talking to our team at AdvancePoint Capital.

A convenient and straightforward way to get business financing – now!

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* All loans made by either WebBank, an FDIC-insured Utah industrial bank, or Bank of the Internet Federal Bank, an FDIC-insured federally chartered thrift located in California. In connection with the loans, the Banks' underwriting conditions and terms apply.