Business Line of Credit
With an instant business line of credit from GoKapital, your business can access funds immediately with minimal paperwork. No pre-payment penalties, and only pay for the loan amount used. Expand business with our fast business line of credit today
What is a Business line of Credit?
A business line of credit (LOC) is a flexible revolving loan, in which a lender, usually a bank or a private lender, and a borrower, agree to a maximum amount of capital that the borrower can withdraw at any time. The borrower has these funds at his or her disposal, as long as he or she doesn’t exceed the maximum amount established in the agreement and makes payments on time.
The balance in a line of credit is revolving, meaning that the borrowers can use the funds, repay, and then spend again in a revolving cycle. In this way, lines of credit are very similar to business credit cards.
Business owners will typically use a line of credit to remodel or expand their store/offices, buy new tools or equipment, meet payroll, purchase inventory, launch a marketing campaign, or cover any unexpected expenses.
An essential advantage of GoKapital’s line of credit for business owners is that it provides more flexibility than a regular business loan.
After reviewing the revenue of your business, we issue an approval within 24 hours.
Decision in Minutes
Receive an Offer
Select Your Loan
Accept Your Loan
Only Pay for Funds Used
How business lines of credit works
Here’s an important question; when it comes to your business, how do you prepare for the unexpected?
Maybe you’ve been saving for a rainy day, however good or bad surprises can happen to anyone and that’s when a revolving business line of credit comes in handy to fill in any financial gaps.
With a revolving line of credit, you can borrow money to even out your cash flow, repay it, and reuse it–as long as you don’t go over the credit limit.
If you use it wisely, a line of credit is a flexible financial tool that can help you grow your business, pay bills, cover payroll, or make short-term investments.
It is a good idea to get a revolving LOC, even if you’re not going to use it right now. Remember that the ideal time to apply for business funding is when you don’t need it, and not when you’re desperately looking for capital.
Business line of credit vs. term loans
One fundamental difference between a line of credit and a regular business loan is that with a LOC, borrowers can withdraw the amount of capital that they consider necessary to cover their business’ needs and pay interest only on the portion of the money that they borrowed. They don’t necessarily have to draw the entire amount approved by the lender. While on a regular business loan, borrowers receive a lump sum of cash that he or she has to pay back in equated monthly installments.
In other words, a line of credit gives the borrower the flexibility to take out as much or as little as they want as long as he or she doesn’t exceed the maximum credit amount.
Unsecured and secured lines of credit
If you are considering getting a line of credit for your business, keep in mind that there are two types; a secured LOC and an unsecured LOC.
The difference between the two is that in an unsecured LOC there’s no collateral required, therefore the approval process will be faster. Whereas in a secured LOC you can get a higher borrowing amount since the LOC is secured against your assets. Most of the times, small business owners will prefer an unsecured line of credit.
How do you get a line of credit for a business?
If you apply for a line of credit with a traditional bank, you’ll have to fill out extensive paperwork to prove that you have steady cash flow and a reliable credit score. Even after submitting all the paperwork, there is no guarantee that your loan will be approved.
Online lenders, on the other hand, have looser qualifications than banks.
With an online lender like GoKapital, the approval process is quick and easy. For instance, if you want to obtain an unsecured line of credit with us, all you need is at least 1 year in business and $10,000 in monthly revenue. After reviewing your business’ revenue, within 24 hours or less, we will let you know if you’ve been approved. We will also inform you of your rates and loan terms.
If you qualify for a line of credit but don’t need to draw any funds yet, don’t worry. You’ll only pay interest on the money you withdraw. If you don’t use any funds, you won’t pay anything back.
Time in Business = 1 Year Minimum
Monthly Revenue = $10,000 Average
Business Bank Account = Min. $500 Avg. Daily Balance
Overdrafts = Less than 5 negative days per months
Provide basic business information
We review your busniess revenue
Your business is approved
Funds are deposited into your account