What Type of Business Do You Have?
SBA Line Of Credit
An SBA line of credit can give your business access up to $5 million dollars of funding. Sounds good right? Keep reading to learn more about the 4 CAPLines SBA line of credit options.
Important Notice: For SBA Paycheck Protection Loans consider Fundera
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| Loan Amounts | $5,000 to $500,000 |
| APR Range | Term Loans: 7% - 30% Startup Loans: 7.9% - 19.9% |
| Repayment Terms | Term Loans: Up to 10 Years SBA Loans: Up to 25 Years |
| Time to Funding | Varies |
| Click “Check Rates” to apply to Fundera | |
What is an SBA line of credit?
Small Business Administration (SBA) loans are a government resource designed to help small businesses and would-be entrepreneurs obtain financing opportunities.
Who qualifies for SBA lines of credit?
Some of the basic qualifications for businesses to qualify for an SBA line of credit include…
- Primary business owner credit score should be 680 or better
- 3 to 4 times maximum debt-to-equity ratio
- Debt service coverage rate of at least 1.25 times
- Collateral and guaranteed required
Is it difficult to get a business line of credit?
Whether your business line or credit is backed by the SBA or not it can be challenging to secure. In most cases you need cash flow, and a good credit score.
How long does it take to open an SBA line of credit?
From application to funding it can take an average of 30-45 days to secure an SBA line of credit.
What are the 4 CAPLines SBA line of credit options?
Seasonal Line of Credit
A seasonal line of credit can help cover seasonal increases including inventory, higher labor costs, or accounts receivables.
How to Qualify:
- Business must meet standard SBA loan requirements
- Business should be in operation for at least one year
- Business should demonstrate a pattern of seasonality
Terms:
Seasonal SBA lines of credit typically have a maximum term length of 10 years.
SBA Seasonal Line of Credit Rates:
- SBA Seasonal Line of Credit less than 7 years: prime + 2.25% - prime + 4.25%
- SBA Seasonal Line of Credit longer than 7 years: prime + 2.75% - prime + 4.75%
SBA Working Capital Line of Credit
Need money to cover general business operating expenses? A Working Capital SBA Line of Credit can help.
How to Qualify:
- Business must meet standard SBA loan requirements
- Business must have physical inventory or accounts receivable
Terms:
A Working Capital SBA Line of Credit typically has a maximum term length of 10 years.
Rates:
- Working Capital SBA Line of Credit less than 7 years: prime + 2.25% - prime + 4.25%
- Working Capital SBA Line of Credit longer than 7 years: prime + 2.75% - prime + 4.75%
Contract Line of Credit
Businesses under a contract or purchase order can use an SBA Contract Line of Credit. This loan can help business owners meet obligations by helping them get the materials, supplies, or labor they need.
How to Qualify:
- Business must meet standard SBA loan requirements
- Must show proof that your business has performed purchase orders or contracts previously
Terms:
An SBA Contract Line of Credit typically has a maximum term length of 10 years.
Rates:
- SBA Contract Line of Credit less than 7 years: prime + 2.25% - prime + 4.25%
- SBA Contract Line of Credit longer than 7 years: prime + 2.75% - prime + 4.75%
Builders Line of Credit
Does your business construct or renovate commercial or residential buildings for resale purposes? If so, you may be able to qualify for an SBA Builders Line of Credit.
How to Qualify:
- Business must meet standard SBA loan requirements
- Proof of experience bidding on and completing similar projects
Terms:
An SBA Builders Line of Credit typically has a maximum term length of 5 years.
Rates:
- SBA Builders Line of Credit rates: prime + 2.25% - prime + 4.25%
How does an SBA line of credit work?
Requirements
Each SBA line of credit can have its own requirements in addition to...
- Business must be for-profit
- Business must meet SBA size standards
- Business should show good character, credit management, and the ability to repay
- Must be an eligible business type
Average Interest Rates
On average most SBA lines of credit have interest rates varying between prime + 2.25% - prime + 4.75%. The term length of the line of credit can impact the interest rate.
Hidden Costs & Fees
An SBA line of credit usually charges lenders a guarantee fee. This fee is typically passed onto the borrower.
Average Terms
Most SBA lines of credit have a maximum term of 10 years.
SmartBiz, SBA Loan Option:
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| Loan Amount: | $30,000 - $350,000 |
| APR Range: | 9.7% - 11.04% |
| Time To Fund: | Typically take several weeks to fund, but can fund as quickly as within seven days. |
| Loan Term: | Maximum loan term is 10 years. |
| Origination Fee: | 4.00% |
| How To Qualify: | 675+ Personal credit score $50,000+ Annual revenue |
| Great Option For: | Borrowers with good credit SBA loans Funding real estate purchases Refinancing debt |
| Credit Check? | Soft credit check and hard pull |
| Co-Applicants Accepted? | No cosigners |
| Direct Pay-Off To Creditors? | No |
| Click “Check Rates” to apply to SmartBiz | |
» MORE: SmartBiz SBA Loan Review
Best Alternatives to an SBA Line of Credit
OnDeck
OnDeck is one of the largest online small business lenders and was founded in 2017.
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| Loan Amounts | $5,000 to $500,000 |
| APR Range | As low as 9.99% |
| Repayment Terms | Term loans up to 3 years |
| Time to Funding | As fast as 1 day |
| Click “Check Rates” to apply to OnDeck | |
Pros
- Transparent terms
- Access to loans through business debit cards feature coming soon
- Funds available quickly
Cons
- Higher APRs
- Origination fee
- No factoring offered (all funding options incur debt)
Lendio
Lendio highlights the ability to facilitate just about any type of small business funding such as invoice factoring, startup loans, and more.
Pros
- Competitive pricing
- Large number of funding options
- Can help just about any business
- One simple application
Cons
- May incur marketing or solicitation after inquiry
- Price bidding can cause uncertainty
Kabbage
Kabbage is a small business online lender that has served over 150,000 businesses.
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| Loan Amounts | $2,000 to $250,000 |
| APR Range | 24% to 99% |
| Repayment Terms | 6, 12 or 18 months |
| Time to Funding | A few minutes to several days |
| Credit Score | 560+ |
| Click “Check Rates” to apply to Kabbage | |
Pros
- Flexibility (use the funds how you want)
- Determines factors besides credit score during approval process
- Quick funding
Cons
- Potentially confusing repayment process and fee structure
- Short repayment terms
- Limited product offering
FundBox
FundBox provides one of the fastest forms of small business financing, a merchant cash advance. On approved loans, you can receive the money in your account as fast as 24-48 hours.
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| Loan Amounts | $1,000 to $100,000 |
| APR Range | 10.1% to 79.8% |
| Repayment Terms | 3 to 6 months |
| Credit Score | No minimum personal credit score required |
| Time to Funding | A few minutes to several days |
| Click “Check Rates” to apply to FundBox | |
Pros
- Fast funds
- No fixed monthly installments
- Bad credit can qualify
- No collateral
Cons
- Expensive
- Temporary solution
- Funds are deducted daily decreasing your cash flow
- Lenders operate in an unregulated industry
- Can lose some ownership of your business
BlueVine
BlueVine is a fintech company that provides secured business loans for small to medium-sized B2B or B2G businesses.
 Line Of Credit |
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| Loan Amounts | $5,000 to $250,000 |
| APR Range | 15% to 78% |
| Repayment Terms | 6 or 12 months |
| Time to Funding | As fast as 24 hours |
| Click “Check Rates” to apply to Blue Vine | |
Invoice Factoring |
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| Loan Amounts | $20,000 to $5 million |
| APR Range | 15% to 68% |
| Repayment Terms | Up to 13 weeks |
| Time to Funding | N/A |
| Click “Check Rates” to apply to Blue Vine | |
Pros
- Majority of business is repeat
- Diverse and rich funding sources
- Invoice factoring 100% online
- No hard credit checks
Cons
- No funding for B2C entities or freelancers
- Personal FICO score of 600 or above preferred
- Factoring transactions are full-recourse
Conclusion
An SBA line of credit can be an attractive option. However, if you’re in need of fast or even same-day business loans you may want to look at other options.
Learn More About SBA Loans
How PrimeRates Works
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