Business Line of Credit
In New Jersey
Businesses need working capital to continue their operations and enhance their ability to grow. However, businesses also sometimes experience downturns or periods during which their available capital is disrupted or insufficient to cover their expenses. Here is some information about business lines of credit and how they work from the finance professionals at New Bridge Merchant Capital.
Contact Us To See How New Bridge
Can help your business grow, fast.
Contact Us To See How New Bridge
Can help your business grow, fast.
Term loans
Up to $2,500,000.00
Lines Of Credit
Up to $150,000.00
MCA's
Up to $500,000.00
Apply for Business Line of Credit In 3 Easy Steps
Applying for a small business loan at New Bridge Merchant Capital is Quick and Simple!
1
Complete the Application
All of your information is kept safe and we only ask for basic information about your business and three months of your most recent bank statements.
2
Get A Decision
Your dedicated loan advisor will review small business loan options with you to find the one that best suits your needs.
3
Recieve Your Funds
Once you complete the online checkout, you can receive your funds as soon as the same day.
What Is a Business Line of Credit?
A business line of credit is an option for businesses that need quick access to a set amount of working capital. For a quick business line of credit in New Jersey, a business will be granted access to a specific amount of credit through a streamlined application process, allowing the business to easily access the approved amount whenever necessary. Businesses might also benefit from a long term business line of credit that allows them to draw money over time as needed up to their credit limit. A business will only have to repay the lender for the funds they use plus interests and fees and will not have to repay the unused credit amounts.
Line of Credit vs. a Loan
A New Bridge Capital Solutions business line of credit represents the total amount of available capital to your business when you are approved. It is the maximum your business can borrow at any time, and the amount can be increased or decreased based on your business’s performance, account utilization, and account status.
A loan is a specific amount of money that a lender provides to a business. A business loan can be an installment loan that has set payments over a pre-determined repayment period. Once you make all of your payments, your loan will end, and the funds will no longer be available to you.
When you draw funds from your line of credit, you create a separate installment loan. For example, if your business is approved for a $50,000 line of credit, and you make a withdrawal of $10,000, you will create a separate $10,000 loan with its own agreement. You will only be charged fees on the amount you withdraw instead of the available credit limit.
How a Business Line of Credit Works
A line of credit is a financial arrangement between a business and a lender that provides a maximum credit up to which the business can borrow. For example, a business with a $50,000 line of credit can borrow up to that amount but does not have to do so. Instead, the business can draw smaller amounts at various times to pay for expenses. The business cannot exceed the defined limit.
For small businesses, the flexibility of a business line of credit is a huge advantage. You won’t have to use all of the funds for which you are approved, so you won’t have to repay the total back to the lender if you don’t use all of the funds.
A line of credit can come in the following forms:
- Secured
- Unsecured
- Demand
- Revolving
- Non-revolving
If your line of credit is revolving, this means that you can continue to borrow money until your business reaches its credit limit. Whenever you draw funds, the amount will be subtracted from the total limit. When you make a payment, a portion will be added back to your available credit minus any interest.
The Function of Revolving Credit
Many companies use business lines of credit to increase their available working capital. Having the ability to draw funds from your business line of credit can help to bridge the gap between your cash flow and the expenses involved with your operations during austere times.
Many lines of credit are revolving, which is more flexible and faster than securing a traditional business installment loan. If you need quick access to working capital, a line of credit is a good option to cover short-term expenses. A revolving line of credit can help your business to manage the cyclical nature of cash flow involved with operating and can help you cover payroll, pay bills, deal with shortages, or make improvements. You will be able to quickly withdraw funds and repay them to help you manage short-term downturns so that you can continue moving forward.
You also won’t have to borrow a fixed amount of money at one time. Instead, you will be able to borrow capital in increments as you need them up to your approved credit limit. You will then need to make payments on a set schedule and can borrow more as your principal balance goes down. A revolving line of credit can help you continue your operations during cyclical or seasonal changes so that you can quickly pursue opportunities even when you do not have sufficient funds to invest. As long as you continue making your payments on time and avoid taking on too much debt to handle, having a revolving line of credit can be a good tool for cash flow management.
When Is a Good Time to Apply for a Business Line of Credit?
While your business should have savings set aside to help you through downturns, the next best option is to apply for a business line of credit for your small business. These types of financing options are designed to help businesses meet short-term needs, including purchasing inventory or supplies or covering expenses.
It is also a good choice if you experience constant expenses combined with fluctuations in your working capital. A business line of credit can provide your business with access to funds so that you can pay your bills on time and purchase needed inventory. In general, a business line of credit is most appropriate when you need capital to cover short-term needs, including covering payroll after hiring new employees, purchasing additional inventory during busy periods, offsetting seasonal downturns in cash flow, or fulfilling large orders. If your business is in a position in which it will need access to more funds soon, a revolving line of credit could be a good option.
Revolving Line of Credit Vs. a Business Credit Card
Revolving lines of credit and business credit cards work in similar ways. However, business credit cards typically charge higher rates of interest and additional fees for balance transfers and cash advances. A business line of credit will also typically offer a higher maximum credit limit than a business credit card. If your goal is to grow your business, a business line of credit is likely the better choice.
Revolving vs. Non-Revolving Lines of Credit
Most small business lines of credit are revolving. However, some are non-revolving. This means that as you borrow funds and repay them, you won't be able to access the corresponding amount later. The credit limit of a non-revolving line of credit will not be replenished as you repay the funds you borrow. While a non-revolving line of credit might offer a lower rate of interest and a predictable payment schedule, it won't offer the same degree of flexibility as a revolving credit line.
How Can a Business Line of Credit Be Used?
If you have a revolving line of credit, you can draw funds for a variety of reasons. For example, if you had an unexpected business expense, you could draw funds to cover it. If you don’t have enough funds to cover payroll, you could use your revolving line of credit to ensure your employees are paid on time. As soon as you draw funds from your line of credit, the money will be transferred into your bank account. If your business is seasonal and experiences periods during which your cash flow is slower, you can also use your line of credit to carry your business through.
Companies typically use business lines of credit to help them pay for things they wouldn’t get an installment loan for. For example, your business might take out a traditional loan to finance your business location and use your line of credit to purchase new machinery once the old ones wear out. You can use your line of credit to pay for nearly any type of business expense. Once you are approved, the cash will be available to you whenever you need it.
Unsecured vs. Secured Lines of Credit
An unsecured line of credit is not backed by the collateral your company owns. By contrast, some lenders offer secured lines of credit. These types of products require you to secure your credit line with business collateral. If you fail to make your payments on time, the collateral with which your line of credit is secured could be placed at risk.
An unsecured line of credit is a product that is offered regardless of your business’s collateral. Instead, approval is based on the quality of your company’s financials and the stability of your business. At NewBridge Merchant Capital, we offer unsecured business lines of credit and do not consider your business’s collateral.
Qualifying for a Business Line of Credit in New Jersey
At New Bridge Merchant Capital, we consider your business’s financials instead of your available collateral. Your ability to qualify for our unsecured lines of credit will be based on our evaluation of the strength of your financials and your business. If your business is profitable and can show that it is making sound business decisions, your likelihood of being approved for a line of credit with us is good. Depending on the factors considered during our underwriting process, some businesses might be eligible for lines of credit of up to $500,000. We prioritize small businesses and strive to provide help to startups and others that some lenders turn away and are your leading lending source.
The application process is simple. You can get prequalified by submitting our simple form or calling us. you will then need to complete the application and include information about your business, your business finances, and your personal information. We need this information to assess your ability to repay amounts you might borrow from your line of credit and understand your business and its financials. After you submit your application, our underwriters will review it and let you know whether your application is approved. If you are approved, you will receive information about the offer, including the credit limit, interest rate, and terms. Once you accept your offer, the funds will be available.
Contact New Bridge Merchant Capital
If you need access to working capital for your small business, you should speak with the finance professionals at NewBridge Merchant Capital. We can help you understand whether you are suitable for an unsecured business line of credit. Call us today at (612) 254-8375 to learn more.
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Frequently Asked Questions:
What Can A Term Loan Do For My Business?
A term loan can provide your business with a lump sum of funds to finance capital expenditures, business expansion, or working capital needs. It typically has a fixed interest rate and a repayment period of 1-10 years, providing predictable monthly payments to manage cash flow. It can help build business credit and improve overall financial stability.
How Long Does It Take To Process My Loan Application?
Cash advance/Term Loan application processing time varies, but it’s typically faster than traditional loan processing. Some lenders offer quick approvals, with funding available in as little as 24 hours.
Am I Penalized For Repaying My Loan Early?
Early repayment of a cash advance loan does not result in a penalty. Some lenders may offer discounts for early repayment or renewing with them before the full term expires. It’s important to review the loan agreement and understand all fees and terms before accepting the loan.
What Paperwork Do I need For An Online Business Loan?
To start the process the typical documents include our application filled out and the last three months of your business banking statements (all pages). In order to close (fund your account) we will need a valid color copy of your driver’s license, a voided check from the account supplied to us and proof of ownership for the business.
Are There Other Fees Involved In An Online Business Loan Application?
Origination fee: This is a fee charged for processing and approving the loan application, which includes verifying a borrower’s information. This is fee is offset by the funding amount at completion of the loan.
Annual fees: (lines of credit): Some lenders charge an annual fee to keep your business line of credit open and active.
Application fee: Lenders sometimes charge a fee for processing your loan application. Put simply, you get charged just for applying. Luckily, these fees don’t seem to be the status quo for business lenders. We rarely see banks or online lenders charge application fees.
Missed payments: This one’s simple. If you miss making a payment on your business loan, your lender might charge you a fee. Most lenders charge a fixed late fee, but many charge a percentage of the missed payment as well. If they do not charge a percentage then they will require a “make up” payment to be made. The vast majority of business loans include late payment fees. If a specified amount of payments (usually 5) is missed, you may go into default status and be charged an additional fee. For more details on how this please reference the Appendix A of the agreement and make sure to read the agreement in full.
How Do I know Which Loan Is Right For Me?
Purpose of loan: Determine why you need the loan and what you will use it for.
Loan amount: Determine the amount you need and make sure the loan amount fits your budget.
Repayment terms: Consider the length of time you have to repay the loan and what your monthly payments will be.
Interest rates: Compare interest rates and determine which one offers the most favorable terms.
Terms and conditions: Read and fully understand the terms and conditions of the loan before accepting it.
Consult with a New Bridge Merchant Capital Advisor to help you make an informed decision.
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