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The Best SBA Line of Credit: CAPLine Terms, Rates, & Options for 2019

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.

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 pattern of seasonality

Terms:

Seasonal SBA lines of credit typically have a maximum term length of 10 years. 

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%

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 it’s own requirements in addition to…

  • Business must be for-profit
  • Business must meet SBA size standards
  • Business should show good character, credit management, and ability to repay
  • Must be 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. 

Best Alternatives to an SBA Line of Credit

OnDeck

OnDeck is one of the largest online small business lenders and was founded in 2017.

Loan Amounts$5,000 to $500,000
APR RangeAs low as 9.99%
Repayment TermsTerm loans up to 3 years
Time to FundingAs 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. 

Loan Amounts$2,000 to $250,000
APR Range24% to 99%
Repayment Terms6, 12 or 18 months
Time to FundingA few minutes to several days
Credit Score560+
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.

Loan Amounts$1,000 to $100,000
APR Range10.1% to 79.8%
Repayment Terms3 to 6 months
Credit ScoreNo minimum personal credit score required
Time to FundingA 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 deducted daily decreasing your cash flow
  • Lenders operate in 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
Loan Amounts$5,000 to $250,000
APR Range15% to 78%
Repayment Terms6 or 12 months
Time to FundingAs fast as 24 hours
Click “Check Rates” to apply to Blue Vine


Invoice Factoring
Loan Amounts$20,000 to $5 million
APR Range15% to 68%
Repayment TermsUp to 13 weeks
Time to FundingN/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 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. Primerates.com provides a secure online platform that allows you to receive multiple personalized loan offers. You can efficiently compare offers and select the offer that best fits your needs. Once your loan is finalized you can receive funds quickly. Ready, set, save time and money at primerates.com.

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