A business line of credit is a mix of a business loan and a credit card. It provides funds for a business which can be used for general expenses (business related) but the disbursement is not necessarily done on a lump sum basis. Therefore, a business owner borrows only the amount that is needed at any given time and pays interest on the same.
Just like a credit card, the amount of money that can be borrowed and the payments are flexible. Also, just like a credit card, the lender can set a limit on the amount a business can borrow.
Business lines of credit are flexible compared to other types of business loans. This gives the borrower the freedom to use a business line of credit loan in Canada as a safety net for times when the business is slow or when the business suddenly spikes and the business needs an instant increase in funding.
Getting a Business Line of Credit
In order to get a business line of credit, lenders usually require that the borrower has a particular monthly revenue along with collateral in terms of short-term assets. The borrower will also need to show that there were no recent bankruptcies, tax lien or foreclosure.
Priority lending helps you build a business line of credit that you can use when needed. When you apply with us, we will review your business profile, credit profile and other details along with the amount of money you require. We will match you with a bank or alternative lender that we have partnered with to help you acquire the funds as soon as possible.