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Business credit lines

Frequently Asked Questions




How Fast is the Process?


FAST : We usually receive approvals within 48 hours of submission of your application. Then, depending on how quickly you supply us with the requested documentation, the business line can be established within the following 10 business days. click here to Apply Now


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What is a Business Line of Credit?


In a nutshell, a business line of credit is an unsecured credit line granted to a business. These unsecured lines were extremely popular in the mid 70s to the early 80s. As the popularity of home equity lines of credit increased, unsecured credit lines all but disappeared from the lending landscapes. We are now seeing a resurgence of these credit lines brought about by the ability of lenders to sell these lines into secondary securitization platforms. click here to Apply Now


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What is a Credit Line?


Think of a credit card that you can cash advance or a home equity line of credit. These are the closest examples of a credit line. A borrower is given an extendable loan limit based upon certain criteria. If, for example, a borrower receives a credit line of 100,000, he/she may extend up to the full amount of the line at any timefor any reason. There is no minimum amount that a borrower is required to take. If you have a $3200 invoice for printing owed to a commercial printer, you merely extend $3200 of the line and pay the bill. If you are attempting to expand your business and require furniture, computers, or other business equipment, you extend that amount necessary to make the purchase. click here to Apply Now


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Who Issues Business Lines of Credit?


Credit lines used to only be issued by business banks. Banks did and still do make business lines very difficult to obtain, generally limiting these lines to miscellaneous 10s of thousands with the exception of only their largest business customers commercial banks. Business Lines of Credit are now issued by both business banks and credit lenders specializing in business lines of credit. This new generation of credit line lenders, has given small business owners the opportunity to compete with larger, better capitalized businesses. click here to Apply Now


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What are the Interest Rates?


The interest rates charged by these credit lenders are very similar to those charged by commercial banks. The rate is tied to the Prime Rate of Interest, which is currently 6%. Depending on various credit criteria (including FICO scores) and the type of business and length of time in business, lenders will add 2 or 3 percentage points to the Prime Rate. These business lines of credit are usually around Prime + 2 or 3. Which, at today’s rate of 6%, would make the interest rates for borrowed funds 8 to 9 percent - - far less than the average 18.9% charged by credit card companies. click here to Apply Now


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How Much are the Monthly Payments?


Monthly payments are dependant upon how much money you owe. The minimum payment is equal to the interest rate on the owing balance divided by 12 months. Example: You have used $20,000 for new computers and office equipment. The interest rate on your loan is 9%. $20,000 X .09 = $1800. $1800 divided by 12 months would equal a monthly payment of only $150. Compare this to the minimum payment for the average credit card at 18.9% equaling approximately $450 or the average car loan even at only 6% of $387 per month (both for the same $20,000 loan). click here to Apply Now


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How Much can we Borrow?


Depending on your business and current credit, business lines can be approved anywhere between 50,000 and 1,000,000 dollars. click here to Apply Now


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Are There Any Restrictions on the Use of the Funds?


No there are no restrictions. However, it is important to know that these lines are being granted for business purposes. While the lenders do not track fund use, nor do they particularly care what funds are being used for, it would be extremely unwise for a borrower to use these funds to play catch-up with out-of-control spending behaviors or for speculative investing. click here to Apply Now


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What is a Shelf Corporation (also known as Stale Corporation) and Why Would I Need One?


A Shelf Corporation is a corporate entity established by a company whose sole purpose is to create/collect corporations that have been in existence longer than 2 years then sell those entities to people needing to show a track record of business ownership. A company may Apply Now out and register 100 corporations, then sit on those corporations for 2 or 3 years, at which time they will transfer ownership of (sell) the corporation to the new owner (you) for purposes of obtaining a business line of credit or for some other business related purpose. The purchaser of a Shelf Corporation is able to establish immediate business credibility. Granting a business line of credit to an ongoing corporation legitimizes the practice of extending these lines.


Most borrowers are required to obtain a stale corporation as part of the business line borrowing process. The majority of lenders require a corporate entity with at least 2 years of clean credit history. Shelf Corporations will oftentimes meet these lender requirements. If you are already incorporated, this item can potentially be waived. click here to Apply Now


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Why Can't I Just Get a Line of Credit in My Personal Name?


Some lenders will permit you to do this – if you have a taxpayer identification number that is different from your social security number, but it is extremely rare. The whole idea behind this process is that these lenders are giving (loaning) money to an ongoing concern with little regard paid to the actual borrowing entity. Once you begin to insert your existing business into the process, the lending waters become less clear.


If you believe your situation would permit you to easily obtain an unsecured line from a commercial bank such as Bank of America, check with them first. If they approve you for a business line of credit that meets your needs, great – if they do not, you can always come back to us. WARNING: Do not apply at multiple institutions. This will lower your credit scores and may prevent you from obtaining funding from us or anyone else. You can try one standard institution such as Bank of America, Wells Fargo, etc. If you are turned down or offered only a very small credit line, do not make the mistake of assuming another bank will be more flexible. Most institutional lenders operate under similar lending guidelines. click here to Apply Now


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Do I Have Personal Liability for the Business Line?


Yes. However, it has been reported by a number of clients that these business lines have not shown up on a personal credit reports unless they become delinquent or go into default. It is important to know that whether or not there is personal liability, these lines are intended to be used for legitimate business purposes. Business Lines of Credit should NEVER be used for speculative investments such as stock, futures, or currency trading nor should they be used for personal purposes such as personal property purchases, vacations, etc. click here to Apply Now


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