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Nov 09, 2023
5 min read
Last update: Nov 13, 2023

Your Guide to Business Line of Credit Calculators

Running a business means navigating a series of ebbs and flows. Successful companies can not only produce record profits but also weather harsh storms. If your business is experiencing a down year, you may consider applying for a business line of credit. 

The good news is that you can use a business line of credit calculator to anticipate the total amount of your loan and monthly payments based on two questions. 

SBG Funding offers a user-friendly business line of credit calculator to help business owners determine their best course of action. 

What is a Business Line of Credit?

A business line of credit is a type of loan that provides the borrower up to a specific loan amount. The borrower can draw on their established line of credit until they reach a limit and will be required to pay interest on the lump sum they borrow. 

The borrower can either make minimum payments on their outstanding balance or pay it off entirely. 

A business line of credit works similar to a business credit card. Businesses can use this credit extension to pay off short-term debts, maintain overhead expenses, and fund long-term growth initiatives. 

With that said, here are the pros of applying for a business line of credit:

  • Applicants can receive a substantial lump sum structured like a credit card instead of a loan. 
  • Taking out a line of credit can help you maximize your company’s cash flow.
  • You can receive favorable terms if you meet the lender’s underwriting requirements.

Business line of credit financial calculators give entrepreneurs the tools to assess how much money online lenders will provide them based on the following:

  • How long they’ve been in business
  • Annual sales volume
  • Credit score (FICO score)

Ultimately, a business line of credit payment calculator helps business owners narrow down their business financing options before they submit a loan application. It also gives applicants a general idea of what to expect.

However, you’ll need to provide more information to receive more concrete loan estimates. 

How To Use a Business Line of Credit Calculator

Using a business line of credit calculator has never been easier. Here is how our calculator works:

  1. Click how long you’ve been in business and use the slider scale to adjust your annual revenue. 
  2. Estimate monthly payments and your repayment period
  3. Customize calculations for different scenarios, such as slow seasons or potential unexpected expenses. Remember, your funding amount is based on your last four bank statements. Applicants can receive funding in a slow season by showing revenue from their highest-earning months. 

As you can see, SBG Funding’s business loan calculator lets you understand your loan payments and conditions based on your specific company information. 

Is a Business Line of Credit Right for You?

Applying for a business line of credit isn’t for everyone. The advantages of taking this approach are:

  • Increased cash flow to handle unexpected expenses and short-term obligations
  • Flexible loan terms based on your annual percentage rate (APR) and amortization
  • Revolving credit and convenience for all kinds of borrowers

If you are facing the following scenarios, it may be wise to apply for a business line of credit at SBG Funding:

  • You have seasonal cash flow needs and need working capital
  • You’re facing unexpected expenses and upcoming growth opportunities
  • You can’t pay your employees in the short-term
  • You need more equipment
  • You want to avoid origination fees
  • You need to manage your company’s off-season financially
  • Your staff can’t keep up with market demand
  • You have bad credit and need an alternative to an SBA loan. With SBG Funding, you have the ability to apply for an SBA loan and receive the short-term funding you need as you wait for your SBA loan application to process. You no longer need to wait on a decision or start all over with funding options should your application be denied. 

Don’t wait any longer to reinforce your business. Apply for a business line of credit with SBG Funding today. 

What Factors Can Influence Your Business Line of Credit?

Applying for a business line of credit is a different process for any business owner. One business owner may receive an attractive loan with low interest. Another may secure a business line of credit at high interest over the long term. 

With that said, here are all the factors that can impact the conditions of your business line of credit:

Your Credit History

Your credit history is one of the most critical factors that can swing your loan application. Lenders will browse your credit history to see your performance with past loans.

They’ll also review your credit history to check for defaults, missed loan payments, and outstanding balances. If you have a responsible credit history, you’re more likely to secure an advantageous loan that’s convenient to manage. 

Otherwise, you’ll be subject to high interest rates, or the lender will deny your application altogether. 

Your Credit Score

Your credit score is a cumulative rating that determines your creditworthiness. It’s also related to your company’s FICO score. 

A high credit score shows lenders they can trust you with high loan amounts. If your lender believes they can trust you, they may lower your interest rate. 

Lenders are less likely to give you a reasonable loan if you have a poor credit score. Finally, you’ll be denied entirely if your credit score is too low. It’s important to mention that applying for a business line of credit will cause the lender to make a hard inquiry on your credit report.

This hard inquiry can drop your credit score down a few points. Fortunately, this judgment doesn’t stay on your credit report for long. 

It’s important to mention that SBG Funding customers are more likely to get approved for an additional round of funding if they are about 40% to 50% paid into their original loan. This makes it possible to build your credit with us if you’re making on-time payments.

SBG Funding even enables customers to refinance to a better offer later if they’ve made regular payments on their original loan. When you apply for a business line of credit with SBG Funding, your credit score won’t be impacted.

However, it will be temporarily affected should you proceed with the loan after approval. 

Steady Revenue

Having consistent revenue proves to a lender that you can make regular payments toward your loan. It also gives lenders the confidence that you won’t default on your loan, especially if you’ve been in business for a long time. 

Most lenders will require borrowers to be in a specific revenue range to apply for a loan. SBG Funding requires a minimum of $250,000 in revenue to apply for a business line of credit. 

Existing Debt

Debt is another crucial factor that can influence your credit terms. If you have existing debt, that can serve as a red flag for new lenders. Existing debt shows lenders you’re a risk, even if your outstanding accounts are years old. 

While existing debt won’t always disqualify you from receiving a small business loan, it will make it challenging to secure a competitive loan with moderate interest. 

Years of Business

The number of years you’ve been in business can impact your borrowing power. Businesses that have been open long can build a rapport with lenders and secure favorable loans. 

For example, SBG Funding requires applicants to be open for at least six months. If they have been open longer, they may receive better loan terms if they have excellent credit and sufficient revenue. 

Usually, the longer a company has been open, the better their loan rates and terms will be. 

Qualifying For a Business Line of Credit

SBG Funding offers flexible repayment terms for all kinds of companies. Here are our eligibility requirements:

  • 500+ FICO score
  • 4 most recent bank statements
  • $250k in annual revenue
  • 6+ months in business

We take pride in our 85% approval rate. Apply today to begin our convenient application process.

Apply For a Business Line of Credit With SBG Funding

Applying for a business line of credit may be what you need to keep your business thriving. If so, the team at SBG Funding can help you receive small business loans on reasonable terms to suit your business needs. 
Apply for a business line of credit with SBG Funding to begin our simple application process.

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