So you're thinking about a Business Line of Credit...

When we first speak to a new credit line applicant, their first initial, logical question is usually, ‘What are the minimum requirements?’ It’s a general question, with a more complicated answer, but let’s break down the requirements for 2 different types of business credit lines. Here, at Line of Credit Depot we work with many different lenders and all of them have different requirements.

These lines of credit can be grouped into 2 tiers: Traditional Bank Commercial Credit Line & Special Bank Commercial Credit Line.

 Tier #1: Traditional Bank Commercial Credit Line

Rates on these Credit Lines range from .75 points to 1.5 points above the WSJ Prime Rate. The credit availability is generally for a term of 2 years, where the principal would need to be paid down to a zero balance or a certain percentage. Monthly payments are made to cover interest and at a minimum, a small portion of the principal.

Business owners that are approved for Tier #1 have the following things in common and meet or exceed these minimum requirements.

Tier #1 Requirements

-FICO #8 personal credit score of over 700

The best way to find this score is to create an account with Experian and search for the FICO #8 credit score. This is the score most used by banks to determine eligibility.

-Time in Business over 2-3 years‍

Businesses that are very new have a significantly high chance of going out of business. Statistics show this, and banks won’t take the risk of a default on a business that is too young. There needs to be evidence that the business is generating revenues on 2 years of business tax returns. Also, the most recent tax return must show profitability.

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