A 6-Step Guide to Getting Large Business Lines of Credit

Whether you are looking to grow your business, make large purchases, take advantage of new opportunities,, or simply manage cash flow fluctuations, a large business line of credit may be exactly what you need for a sustainable expansion and long-term stability.

There are many types of line of credit that you can apply for, but if you are looking to reach a higher financial limit, ranging from hundreds of thousands to several million dollars, such as an $8 million loan or a $10 million loan, lenders offer a particular financial product that may be the most suitable for your goals. 

That’s why we’ve prepared a comprehensive guide to help you navigate the peculiarities of getting a large business line of credit – just continue reading to learn more.

What Is a Large Business Line of Credit? 

A large business line of credit offers businesses access to a substantial amount of funds, which can be borrowed, repaid, and reborrowed as needed. 

The actual limit may vary by financial institution, but some lenders like National Business Capital offer up to $15 million or even more depending on your company’s creditworthiness and financial health.

Large business lines of credit are designed to help companies manage cash flow, finance operations, or capitalize on new growth opportunities. As we mentioned earlier, you will only pay interest on the amount used, not on the whole limit of the loan.

What Are the Different Lines of Credit Types?

Before we get into our step-by-step guide, let’s take a quick look at the different lines of credit and how they compare to each other. Understanding your borrowing options will help you make better decisions for your business. 

Business line of credit

This financial product is specifically designed for business use, and it is great for covering unexpected expenses or managing cash flow more effectively. It provides a lot of flexibility, as companies can borrow, repay, and borrow again up to a certain limit. 

The maximum amount varies mainly based on your business’s creditworthiness, and you will only pay interest on the amount drawn, not on the entire credit limit. 

Revolving line of credit

Revolving lines of credit allow you to draw funds as needed, and just like business lines of credit, you only pay interest on what you draw. Once you’ve repaid the funds, you can draw the same amount of funds again.

Another thing to keep in mind is that there are often minimum monthly payment requirements, which may be a percentage of the balance or a fixed amount.

Secured line of credit

A secured business line of credit is a flexible financial product that is tied to a collateralized asset, such as real estate, inventory, or equipment. Providing a collateral means that you are giving a guarantee for the lender to recover potential losses in the case of defaulting.

Because it’s secured, lenders are usually able to offer lower interest rates and higher credit limits – as opposed to unsecured lines of credit. If you default on your credit, the lender has the right to seize the collateral to recover the borrowed amount. 

Unsecured line of credit

In contrast to secured business lines of credit, unsecured ones don’t require a collateral to guarantee security, but this also implies that interest rates will be higher as the risk for the lender will be higher as well. 

You can also expect to get lower credit limits, which may not be the ideal situation if you are looking to get a large business line of credit for your business.

6 Steps to Getting a Large Business Line of Credit

1. Assess your business needs

The first step in getting a large business line of credit is to assess your business needs. In other words, what is your goal with this loan, and how much do you need exactly? 

If you are not sure how to make this assessment, here are a few key questions that you will need to ask yourself about your business before reaching out to a lender:

• Why do I need a large business line of credit? – for example, are you planning to use it to expand to new markets? Maybe you need the funding for operational expenses?
• How much do I need to borrow? – estimating the right amount you need to borrow is crucial. While it’s good to have a higher threshold for borrowing funds, overestimating can lead to higher unnecessary costs and less favorable terms. On another hand, underestimating the amount can lead to a shortfall of funds.
• What is my borrowing capacity? – while the lender will estimate your borrowing capacity when reviewing your application, it is important to assess your business’ current financial health beforehand. This will give you an idea on what to expect.
• Can my business afford the repayments? – once you know the amount of funds that you are looking to borrow with a large business line of credit, make a rough estimation of the monthly repayments and whether you can actually afford them.
• When do I need the funds? – it is important to determine when you will need access to the funds, and if the timeline aligns with the lender’s process for approval and disbursement.

While you may be tempted to start your large business line of credit application right away, don’t skip this exercise about assessing your financial situation. 

Doing this will not only help you understand your needs and whether you can actually meet them with this loan, but it will also prepare you for the actual application. Remember, lenders will need clear answers to these questions as well!

2. Review your credit score

When applying for a large business line of credit, another key step you’ll have to take is reviewing your personal and business credit scores.

This is one of the most important factors that lenders take into account to assess your creditworthiness, potential risks, and your capability to repay the loan. 

Keep in mind that each credit bureau (Dun & Bradstreet, Equifax Business, and Experian Business) has its own method for calculating credit score. You can request a copy of your business credit report from each one of them. 

Once you receive your report, make sure to check it for accuracy and ensure that there are no errors or discrepancies that may be bringing your score down. If you happen to find any errors, dispute them with the respective credit bureau.

• What is a good business credit score for a large business line of credit?

The higher the amount of the large business line of credit, the riskier it may be for the lender. This means that keeping a good credit score is a must, ideally 80 or above for Dun & Bradstreet PAYDEX. For Equifax, a score of 660 is considered good, while for Experian, we are looking at any score above 75. 

• What is a good personal credit score for a large business line of credit?

When applying for a large business line of credit, your personal credit score also matters – the higher your score, the more likely it is for you to get better terms and rates. For Equifax, Experian, and TransUnion, you will need a personal credit score of at least 670 to be considered good, but above 800 can get you higher limits and lower rates.

3. Prepare a strong business plan

Getting a large business line of credit isn’t necessarily easy – you will have to prepare a strong business plan to present to your lender, and convince them that your business is a solid investment. 

Your lender will want to see that your business is viable and that you have an adequate strategy in place, taking into account all possible outcomes. When building your business plan, make sure to include:

• An executive summary of your business
• A business description, including industry and target market
• A comprehensive market analysis
• Your business’s legal structure and organizational framework
• Your product or service line and the value they provide
• A carefully crafted marketing and sales strategy
• Your funding request, including future financial planning
• Comprehensive financial forecasts
• Analysis of potential risks and challenges

4. Collect your financial documents

Before getting a large business line of credit, the next step you will need to take is to prepare all the documentation that you are going to need during the application process. 

In addition to the detailed business plan we mentioned in the previous section, be prepared to show your financial statements (including balance sheets, income statements, cash flow statements) for at least the past 2 years.

Other documents that your lender may want to see include:

• Tax returns
• Bank statements
• Legal documents
• Debt schedule
• Collateral documentation (if it applies)
• Credit report authorization
• Ownership and affiliations

You may also be asked to show your personal financial statements and recent tax returns, especially if you are a small business or a startup. 

5. Research lenders

When researching lenders, keep in mind that banks are not your only option for getting a large business line of credit. In fact, traditional lenders may not be the ideal alternative, as they often have longer processing times, stricter qualification criteria, and offer less flexibility.

In addition, the application process with banks is generally more paperwork-intensive, requiring detailed financial statements, business plans, tax returns, and more, which can be time-consuming to compile.

Instead, opt for online lenders – they typically use advanced technology and algorithms for the application process, which speeds up the approval and funding of your line of credit. 

They offer a more simplified application process and a lot more flexibility when it comes to lending criteria. This means that you may still be able to get a large business line of credit even if you have a less-than-perfect credit score.

6. Apply to multiple lenders

If you are looking to get a large business line of credit, keep in mind that applying to one lender only may not be the best way to go – it will not only limit your chances of approval, but also your terms and rates.

That’s why we recommend applying to multiple lenders. Doing this is easier than you think – instead of sending dozens of applications manually and trying to compare terms and rates on your own, you can apply easily with National Business Capital. 

With a single application, you will get multiple offers from more than 75 lending partners, so you can choose what fits your business goals and needs the best. Find, compare, and secure the most competitive financing options in minutes!

Applying for a Large Business Line of Credit

If you are looking for the right lender for a large business line of credit, look no further than National Business Capital. 

With $2+ billion financed since 2007, multiple awards, and an experienced team of Business Finance Advisors, we have everything you need to find the best financing options for your project.

Are you ready to get started? Apply here.