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How to Qualify for a Business Line of Credit as a Startup in NYC

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A business line of credit is one of the most flexible financing options for businesses. This loan provides access to a credit line, so you can withdraw funds whenever you need them. Starting a new business and making it operational requires a lot of funding and there are many unexpected costs involved. Having a line of credit allows you to borrow money on an as-needed basis and you have full control over how you use it. From buying supplies to paying workers, you can look after your regular operational expenses using LOC financing.

Qualifying for a business line of credit involves various factors that we have discussed below. Keep reading to find out.

Annual Revenue

When applying for a line of credit loan, you will need to show your annual revenue. Lenders will evaluate your financial documents such as bank statements, profit, and loss statements, balance sheets, tax returns, etc., to evaluate your cash flow and annual revenue. This helps them determine whether you’ll be able to repay the loan in the future.

If your minimum annual revenue is from $25,000 to $100,000, you will qualify for a business line of credit loan from a private lender. On the other hand, a bank might require more details.

Personal Credit Score

To secure a LOC loan, you need at least a personal credit score of 500 to qualify. If your credit score is 600 or more, you will get better options and terms for your loan, along with lower interest rates. On the other hand, if you want a LOC loan from a traditional bank, you need at least a 660 personal credit score or more.

Even if a private lender doesn’t have any minimum score requirement, they will still base their decision on it. Therefore, a personal credit score is an important factor in qualifying for a business line of credit.

Trading History

To qualify for a business line of credit loan, you need at least six months long trading history, (even more if you’re applying at a bank). Lenders are willing to offer better terms and rates to entrepreneurs with over a year in the business. So it’s best to wait out a few months if you’re new in the business before applying for a LOC loan.

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If you fulfill these three requirements, your chances of qualifying for a business line of credit loan increase significantly. However, as a startup, it can be difficult to meet these requirements. Therefore, at Whitestone Fund, we offer flexible financing for businesses in NYC.

We start our process with a consultation session where we discuss your needs and sales projections. This helps us determine whether LOC financing is the right option for you. Otherwise, our loan agents will guide you through other options such as working capital loans, merchant cash advances in NYC, etc.

Our loan acceptance rate is 95%, so you are more likely to get financing for your startup. Contact us now to schedule a consultation session now.

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