What happens when a business owner applies for business credit? Answer: An approval, decline or offer is dependent on the type of funder, lender or brokerage the business owner applied with.  

If an offer from a small business lender or broker is generated, how exactly does the business owner know that this offer is the best possible option? Answer: The business owner doesn't really know, unless they understand how their business stacks up to the minimum qualifications for all available national programs.

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Business owners actually don’t really know if they are getting the most value from an offer, unless they understand these minimum requirements breakdowns. Here are the basic minimum requirements to get approved for these two types of business credit programs:

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With over $300 million in small business funding transactions, we here at Line of Credit Depot understand that every business is different and is differently scored for different small business debt programs. We generate customized options for the applicant, and understand the likelihood of approval for certain programs, all with a likelihood score of 96%+ accuracy rate. 

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Why does this matter? The main determinant of whether business debt would be good or bad for the business comes down to really the use of funds. But, the issue we see paramount of any other factor to determine if the debt is ‘best’ for the business owner is the payback time of the credit. How quickly does the money need to be returned? If there is a long payback period, the business has the power to actually use the money. Which means the business uses the money to constantly generate more and more revenue, then the cost of the money becomes less and less important. The cost of the money will be absorbed by the profit margins. So for example, if a merchant draws $50,000 from a line of credit as they await their AR (Accounts Receivable) to come in, let's say 30 days…the cost of capital can be accurately calculated. Once the AR comes in, the draw can be paid off. 

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