Can a New LLC Get a Business Line of Credit?
Starting a new business comes with financial challenges, and securing the right funding can be critical to growth. One common question new business owners ask is:
Can a new LLC get a business line of credit? The short answer is yes, but there are factors to consider when applying.
What Is a Business Line of Credit?
A
business line of credit is a
revolving credit facility that allows businesses to
borrow funds as needed, up to a set limit. Unlike a traditional business loan, you only pay interest on the amount you use, making it a flexible financing option for managing cash flow, covering unexpected expenses, or seizing business opportunities.
Can a New LLC Qualify?
A new LLC
can qualify for a business line of credit, but lenders will assess specific criteria, including:
1. Business Credit History
- If your LLC is brand new, you likely don’t have an established business credit score. In this case,
lenders may require a personal guarantee and check your personal credit score.
- Building
business credit early by opening trade accounts with vendors or using a
business credit card can improve your chances.
2. Revenue and Financials
- Some lenders require
at least 6–12 months of business revenue history.
- Alternative lenders may offer options based on projected revenue or financial forecasts.
3. Personal Credit Score
- For new LLCs without a credit history, lenders often consider the
owner’s personal credit score.
- A
credit score of 650+ increases approval chances, while scores below that may require secured credit options.
4. Collateral vs. Unsecured Credit
- Some lenders offer
secured business lines of credit, requiring assets (like equipment or inventory) as collateral.
- Unsecured business lines of credit are available but usually require
strong personal credit and financial stability.
How to Get a Business Line of Credit for a New LLC
If you’re ready to apply, follow these steps:
1. Establish Business Credit
- Register with business credit bureaus (Dun & Bradstreet, Experian, Equifax).
- Open
vendor accounts that report to business credit agencies.
2. Improve Your Personal Credit
- Pay off existing debts and maintain a low credit utilization ratio.
- Avoid late payments to boost your FICO score.
3. Prepare Financial Documents
- Bank statements, profit & loss statements, and business plans can help secure approval.
- Even if you’re a startup, showing
projected revenue helps.
4. Apply with the Right Lenders
- Traditional Banks: Best for businesses with 2+ years of revenue history.
- Online Lenders: Offer flexible terms for newer LLCs.
- Credit Unions & Fintech Lenders: May provide
lower interest rates and easier approvals.
Best Lenders for a New LLC Business Line of Credit
Unlike traditional lenders, we go beyond just offering credit. We
help businesses raise collateral after underwriting their deal, ensuring they secure the funding they need even when assets are limited.
Final Thoughts
A
new LLC can qualify for a business line of credit, but
personal credit, revenue, and lender selection play a crucial role. Building business credit early and working with alternative lenders can help secure funding. If you need
fast approval and flexible terms, explore lenders offering
unsecured business credit lines.
Looking for funding?
Apply today for a business line of credit
and grow your LLC with financial confidence.