business line of credit
Get a business line of credit
- Apply up to 4 lenders in one application
- Get finance options without affecting your credit score
- Tailored support from a specialist
- Receive funding in as little as 48 hours
Whether you've been in business for a while or you're just starting out, understanding financial tools such as a business line of credit can enable you to access capital when you need it.
Here’s what we’ll cover:
A business line of credit is a type of flexible finance that allows you to borrow funds up to a predetermined limit. Unlike a traditional business loan where you receive a lump sum upfront, a line of credit offers continuous access to funds as needed, with interest charged only on the amount borrowed.
You can think of a business line of credit as a safety net that you can dip into whenever cash flow becomes tight, or when unexpected expenses arise. Once approved, you can draw funds from your credit line as required, up to the specified limit.
Here’s how the process works:
Getting a business line of credit involves a similar process to other types of business finance. Typically, you'll need to demonstrate your business' financial stability, historical revenue, and have a good business credit score. This means that to get a business line of credit you’ll likely need to provide the lender with documents such as your latest set of filed accounts and 6 months business bank statements. Some lenders may also assess a business plan or cash flow projections to gauge your ability to repay the credit line.
While both a business line of credit and a business term loan provide access to capital, they differ in terms of their structure and usage:
Find out more about the differences between a line of credit and a term loan.
When considering a business line of credit, it's helpful to know there are two main types: revolving and non-revolving lines of credit.
A revolving line of credit, also known as a revolving credit facility, acts as a flexible cash reserve that you can continuously dip into. Like a line of credit, when you get a revolving credit facility you’ll be approved for a maximum amount which you can borrow and repay as needed.
The key difference to a line of credit is that as you pay back what you borrow, the amount becomes available to use again. This can be handy for managing day-to-day expenses, handling surprises, or taking advantage of opportunities that pop up.
Non-revolving lines of credit provide a set amount of funding for a specific purpose or period. Once you use it and repay it, you can't borrow from it again under the same terms.
This type of finance is more like a traditional loan but with the flexibility to withdraw funds as needed within the set limit. It's typically used for one-time expenses like buying equipment, or funding a project.
Find out more about the difference between a line of credit vs a revolving credit facility.
Here’s how you can apply for a business line of credit with Capitalise:
1. Tell us about your business funding needs
Once you start your funding search, let us know what your business does, what you want to use the funds for and how much you’re looking to borrow.
Our specialists will help you understand how much you could borrow.
2. Find the facility that best suits your business
Find your funding match from our panel of over 100 business lenders.
A funding specialist will talk you through the lenders that could provide a facility that suits you.
3. Apply to up to four lenders with one application to save you time and ensure your business doesn't have unnecessary credit checks
With a Capitalise for Business account, you can upload all your documents to one application.
A funding specialist will help put together the finishing touches, and send it to the selected lenders.
4. Get your facility set up in as little as 48 hours
Track responses from lenders on your Capitalise for Business account.
If approved, you could get a line of credit in as little as 48 hours.
Tip: you can also check your funding eligibility instantly with your Capitalise for Business account.
A business line of credit can be short term or long term, depending on the terms that the lender offers you.
Short term business lines of credit typically have a maturity period of less than a year, and are often used for managing cash flow fluctuations, covering short term expenses, or taking advantage of immediate opportunities.
On the other hand, long term business lines of credit can have a maturity period of several years and are often used for financing larger projects, or supporting ongoing operations.
A line of credit can be either secured or unsecured, depending on the lender you apply to and your business’ specific circumstances.
Secured lines of credit require collateral, such as a property or a high value asset. With a secured line of credit, if the borrower defaults, the lender can use the assets to recover their losses.
Unsecured lines of credit, on the other hand, do not require collateral. This means that they often come with higher interest rates because the lender bears a higher risk.
A business line of credit and a credit card are very similar, with both providing access to funds on an as-needed basis. However there are a couple of differences between the two:
