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Types of Business Line of Credit
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Secured Business Line of Credit
A secured business line of credit requires collateral, such as inventory, accounts receivable, or other business assets, to back the credit line. The collateral reduces the lender’s risk, often resulting in a higher credit limit or lower interest rate. This option is ideal for businesses with valuable assets looking for more borrowing power at favorable terms.
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Unsecured Business Line of Credit
An unsecured business line of credit does not require collateral, making it a more accessible option for businesses without significant assets. However, lenders often require strong credit scores and financial documentation to mitigate their risk. This type of credit line offers flexibility but may come with higher interest rates or lower limits compared to secured options.
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Revolving Business Line of Credit
A revolving business line of credit allows you to borrow, repay, and borrow again as needed, up to the approved credit limit. This flexibility is perfect for managing ongoing expenses like payroll or inventory replenishment. As you repay the balance, the credit becomes available again, ensuring continuous access to funds for day-to-day operations.
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Non-Revolving Business Line of Credit
With a non-revolving business line of credit, you receive a set amount of credit, but once it’s used and repaid, the line of credit doesn’t renew. This option is better suited for one-time expenses, like purchasing new equipment or funding a specific project, where you don’t require repeated access to the funds.
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Traditional Bank Business Line of Credit
Traditional bank lines of credit are provided by banks, typically offering competitive interest rates and favorable terms. However, the application process can be lengthy, requiring extensive documentation. This option is best suited for established businesses with strong financials and a solid track record.
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Online Business Line of Credit
Online lenders offer business lines of credit with quicker application processes and faster approval times. While interest rates may be higher, this option provides fast access to funds, making it an excellent choice for businesses that need capital urgently or don’t qualify for traditional bank loans.
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Business Credit Card as a Line of Credit
A business credit card functions as a line of credit, allowing you to borrow up to a pre-approved limit. It’s a convenient option for smaller, recurring expenses like office supplies or travel. While it typically comes with higher interest rates than other credit lines, it offers flexibility and rewards programs that can add value to your spending.
Why Choose Capixa for Your Business Line of Credit?
We specialize in offering personalized business line of credit to tackle the unique challenges businesses have when requesting a business line of credit, from equipment purchases to business expansion.
With a proven track record of success stories from business professionals, competitive terms, and industry-specific expertise, Capixa is committed to helping you grow your business and improve your revenue.
FAQs About Business Line of Credit
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What is a business line of credit?
A business line of credit gives you access to a revolving pool of funds you can draw from whenever you need.
Unlike a traditional term loan, you only pay interest on the funds you use, and as you repay, those funds become available again — offering a continuous source of financing that grows with your business.
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What credit score do you need for a business line of credit?
Most lenders prefer a personal credit score of at least 600-650 for a business line of credit, though requirements can vary. At Capixa, we review your credit score alongside other factors, such as business revenue, cash flow, and financial history, to provide a flexible assessment.
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How big a line of credit can a business get?
The size of a business line of credit typically ranges from $10,000 to $500,000 or more, depending on factors like your business’s revenue, cash flow, credit score, and financial stability. At Capixa, we work with you to determine the right credit limit based on your specific needs and business profile, providing enough flexibility to support your growth goals without overextending your debt.
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How fast can I access funds with a business line of credit?
Our goal is to make funds available to you as quickly as possible. Once your line of credit is approved, you’ll have access to funds, often within one business day.
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What can I use my line of credit for?
Capixa’s line of credit can be used for a variety of business needs: inventory purchases, payroll, marketing campaigns, or to prepare for seasonal demands — whatever your business needs to stay competitive and agile.
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Are there any fees for applying?
No, there are no fees to apply for a line of credit with Capixa. All consultations are free, and any costs are clearly outlined once you receive an offer.
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How do I apply for a business line of credit?
To apply, follow these simple steps:
- Submit your online application — no application fee, no impact on your personal credit, and no obligation to accept the offer.
- Within 1 hour, your dedicated account manager will reach out to learn more about your business, review documentation, and discuss terms that fit your needs.
- We review your application and present financing options within 6-12 hours.
- If you’re satisfied with the offer, you could receive funding as soon as the same day.
- Need additional financing later? Return anytime to seize new growth opportunities!
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