Qualify · 6 min read

How to qualify for a business line of credit

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A line of credit is the most flexible money a business can hold, which is exactly why funders are selective about who gets one. Here is what they weigh, and what you can change before you apply.

01What a line actually is

An approved limit you can draw against as needed, repay, and draw again. You carry cost on what you use rather than on the full amount. That flexibility is the whole point — and the reason it suits uneven cash flow better than a lump sum does. Lines we work with typically run up to $250,000.

02Time in business

The single most common gate. Longer operating history means more data to underwrite and fewer questions asked. Under a year is not disqualifying, but it narrows the field and usually means a smaller starting limit.

03Revenue, and how steady it is

Consistency often outweighs size. Predictable monthly deposits underwrite better than the same annual revenue arriving in two unpredictable spikes. If your business is genuinely seasonal, say so up front — it is a normal pattern, and explained seasonality reads very differently from unexplained volatility.

04What your bank statements say

This is where most decisions are actually made: average daily balance, whether the account goes negative, how many NSFs appear, and whether existing funding payments are already drawing on the same revenue. What underwriters look for in your bank statements walks through it line by line.

05Credit

Owner credit matters, though for revenue-based products it matters less than the deposits do. Damaged credit tends to shift which funders will look and on what terms, rather than closing the door outright.

06What strengthens a borderline file

• Keep the operating account positive — a clean 90 days changes the read.
• Clear or consolidate existing positions before asking for new capital.
• Run revenue through one primary account so the picture is complete.
• Ask for a limit your deposits support, then grow it. Right-sized and approved beats ambitious and declined.

07Line or term loan?

If the need is a known amount for a known purpose, a term loan is usually cheaper. If the need is timing — covering gaps, buying inventory ahead of a season — the line is worth its cost. The comparison lays both out.