Like any small business owner, you’ve probably encountered a cash flow issue at least once. Maybe it was because you got a new piece of equipment or hired a new employee before you quite had the funds to cover the cost, or maybe a customer was delayed in getting their payment to you. Either way, realizing that you’ve got a shortage of cash is never fun or easy. If you’re in that situation now and have already gone through all of your options and come to the conclusion that business lines of credit are the solution for you, there a few things that you’ll need to know when it comes to applying for and getting that funding approved. 

How to Get It

Business lines of credit do tend to have more restrictions for use and more requirements for eligibility, but they will allow you to keep your business and personal finances separate. There are a handful of different sources from which you can get this type of funding, including a traditional financial institution, a number of different online lenders, and of course the U.S. Small Business Administration, which offers various types of funding specifically designed to help small businesses out. With any of these options, though, it’s a good rule of thumb that your business needs to be bringing in at least $25,000 annually, and have been up and running for at least six months. And, though it does vary as to whether a lender has a minimum credit score, if there is one, it tends to be around 500. 

Of course, the larger the sum you want to have available to you, the more strict the requirements, and the higher the eligibility minimums. Sometimes, higher sums requested will require that you provide some sort of collateral or a personal guarantee so that if you’re unable to make payments, the lender will be able to seize your business’s assets. And, no matter how much money you’re requesting, you’ll always have to figure in interest rates when considering what you can repay. 

If your business needs to have access to additional funds over a longer period, business lines of credit can be a fantastic option, due to their flexibility and reliability. As long as your business is able to meet some basic requirements, you should have no problem finding a lender who can help provide you with funding of this sort so that your business can overcome a shortage of funds.