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Having access to cash as a small business is crucial for growth and flexibility. Business lines of credit have always been an ideal source of financing…for those who could qualify. A traditional line of credit from a bank offers some of the lowest rates and largest credit maximums, but they also require good credit scores and proven track records of substantial annual revenue. Fortunately, for all those businesses that don’t fit that profile, many alternative lenders offer business lines of credit to meet their needs.

Invoice-backed Lines of Credit
Similar to invoice financing or accounts receivable financing, invoice-backed lines of credit are made based on the number and size of your unpaid invoices. An alternative lender will give you a maximum credit limit according to the value of your outstanding invoices and that limit can increase as your business invoices expand.

Equipment-backed Lines of Credit
For businesses that have valuable company equipment, alternative lenders are willing to provide lines of credit based on the worth of that equipment. The collateral could be anything from machinery to vehicles to medical equipment. While the interest rates on these lines of credit will be higher than on those at traditional banks, they still make a great pool of cash available for growing companies. It is important to understand the risks however, as these loans will put a lien on the equipment.

Short-term Lines of Credit
These loans work the same as traditional lines of credit in that you are approved and given a maximum credit limit that can be tapped at anytime. The difference is that short-term lines of credit are made by alternative online lenders and the interest rates will be higher. Because these loans can be approved very quickly and have lower credit requirements, they often appeal most to fledgling businesses or those with less-than-perfect credit.

With several options to choose from, business lines of credit can be a great source of funding for everyone today.


Search for Small Business Loan Sources and receive your matched lender list
AND received FOUR free Business eBooks worth $39.95!
Search for Small Business Loan Sources