How Do You Obtain an Instant Business Line of Credit?


Quick Answer

The process of obtaining an instant line of credit varies by lender; for instance, Kabbage requires you to sign up on its site and link the services you use in the course of business, such as Authorize.net and Square, for the lender to gauge the health of your operations, states its website. In contrast, OnDeck requires you to accept a general lien your business assets to get loans.

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Full Answer

Small businesses with few assets and a need for the flexibility that on-demand funds offer should consider obtaining unsecured lines of credit, suggests CreditCards.com. To qualify for this form of financing, business owners must first prove their personal finances are in good order as financial institutions require personal guarantees to extend these loans, particularly the first time. Prospective borrowers must have a FICO score of at least 680 and should show evidence of having accumulated personal assets such as savings or real estate.

To be eligible for unsecured lines of credit, prospective borrowers must also prove that their businesses can generate the cash needed to pay these loans, notes CreditCards.com. They should thus keep their receivables up-to-date. Prospective borrowers should also provide any other evidence necessary to convincingly argue out their cases.

Before committing, business owners should find out the costs associated with a particular unsecured line of credit, explains CreditCards.com. This is because some lenders, similar to payday loan lenders, levy inordinately high interest rates and fees for these loans. Generally, business owners should expect to pay interest rates equivalent to an aggregate of the prevailing U.S. prime rate plus 1 to 5 percentage points, depending on the specific nature of the business.

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