Is It Difficult To Get a Business Line of Credit?

by Backd Business Funding
October 24, 2022
Is It Difficult To Get a Business Line of Credit?

As a business owner, you’re under a lot of pressure, especially when it comes to finances. But there are ways to manage financial tension without stretching yourself too thin. Obtaining a business line of credit helps you expand your available working capital so you can fund opportunities and pay off unexpected challenges with ease. 

So, where do you begin? Understanding how to get a business line of credit may seem intimidating at first, but it’s less involved than you might think. 

What Are the Requirements for a Business Line of Credit?

Although business line of credit requirements vary depending on the lender you choose, they'll generally account for: 

  • Your monthly revenue

  • How long your business has been in operation

  • Your credit score

  • Where your business is located

One of the most efficient ways to increase your chances of approval is to improve your credit score. Although the actions needed to increase your credit score differ depending on your unique situation, there are three general steps you can take to make positive changes:

  1. Don’t Close Your Unused Accounts: Closing old credit accounts actually damages your credit score, so it’s best to keep all of your accounts open even if you aren’t using them. 

  2. Open a New Business Credit Account: Opening an additional business account through a commercial bank and taking out a company credit card will likely improve your credit score, so long as you pay your bills on time. This is especially true if you have very few existing credit accounts—having no credit, or limited credit history, means lenders have less to base their decision on as they review your application.

  3. Ensure Your Information Is Accurate: Unfortunately, credit agencies make mistakes. This means you should closely review your reports and check for inaccurate information. If you identify any discrepancies, you can call the credit reporting agency to dispute them. 

In addition to improving your credit score, the type of lender will also affect your chances of obtaining a business line of credit. In short, some lenders have stricter requirements than others.  Traditional lenders, like banks, often require businesses to have an established reputation and very consistent revenue to secure any type of financing. This makes it difficult for smaller and newer businesses to obtain the funding they need. 

However, when you partner with a lender like Backd, the requirements are much less narrow. We simply ask that you have: 

  • At least 1 year in business

  • A minimum FICO score of 600

  • A minimum of $300,000 annual revenue

  • A US-based business

How Do I Get Business Credit Right Away?

Although there is no such thing as a truly instant business line of credit, there are financial institutions that offer a fairly speedy approval process. For example, we typically approve online applications in under 24 hours if you qualify.

After you’ve been approved for your line of credit, you can request a cash advance and use the credit line whenever the need arises. Unlike traditional business loans, you have the flexibility to borrow up to a set amount and only repay the amount you withdraw, with interest.  

If you’re looking for even more flexibility, revolving lines of credit allow you to quickly access funds once you have paid down your current balance. This option often appeals to business owners because it allows you to increase your remaining credit by paying back a portion of the funds you borrowed. Here’s an example:

Let’s say you were approved for a revolving business credit line for $30,000. If you spent $5,000, you would pay interest on that $5,000 as you pay it back. After taking out the $5,000, you would have $25,000 left to borrow. With a revolving line of credit, your limit is replenished as you pay back what you borrowed. So if you paid back $2,000, you would have $27,000 to spend.

Is It Hard To Qualify for a Business Line of Credit? Not When You Partner With Backd

All businesses deserve to explore new opportunities and navigate uncertain times without breaking the bank. At Backd, we understand the unique challenges business owners face, and work hard to make it as easy as possible for you to receive the funding you need. Here’s our simple four-step process: 

  1. Complete our three-minute application process and receive a response in 24 hours.

  2. Use our intuitive dashboard to access your funds and track your payments.

  3. Follow our weekly payment schedule.  

  4. Watch your credit automatically reload as you pay your balance.

Ready to propel your business forward? Take the first step and apply for your business line of credit today

What would you do with the right amount of capital?

Working Capital Advance

Easy payment structures offer amounts with fast turnaround, Simple and easy process to access working capital.

  • Flexible - no collateral required
  • $10K - $2M
  • Terms up to 16 months
  • Automatic daily or weekly, or semi-monthly payments

Business Line of Credit

Get instant access to revolving credit with unlimited terms, and the best rates for your business.

  • Draw funds anytime
  • $10K - $750K
  • Unlimited terms, incredible rates
  • Soft credit pull that doesn't affect your credit score