Unsecured lines of credit function similarly to a business credit card, allowing you to draw funds as needed up to a credit limit without requiring collateral (e.g., equipment, real estate, or personal guarantees). You only pay interest and fees on the amount you used, and as you make repayments, that credit line is restored, and you can draw from it again.
However, it’s important to carefully assess where you’re applying for a line of credit because it affects your repayment terms and how quickly you can access funds.
You have two options when applying for an unsecured business line of credit:
- You can go to a traditional bank, but you’ll need 700+ credit, two years of tax returns, strong profitability, and cash reserves. Applications may also take months to finalize.
- You can opt for an alternative lender offering revenue-based financing, where qualification is easier. They mainly evaluate your revenue and you can close within 24 to 48 hours.
This article reviews the differences between applying for an unsecured line of credit from traditional banks versus revenue-based financing companies. We also discuss how Redline Capital has helped thousands of companies secure quick funding from reputable lenders.
We are Redline Capital, a revenue-based financing provider helping businesses open unsecured lines of credit. Apply by filling out a short online application, and we’ll send you multiple offers that fund on the same day or the next.
Banks Offer Unsecured Lines of Credit, But Have Strict Criteria
The process of applying for an unsecured business line of credit from a traditional bank can be challenging and time-consuming.
This is because banks follow very strict criteria and need to consider various factors about your business before making their decision.
The exact eligibility requirements vary depending on the lender and how much money your business needs, but in general, you’ll need the following:
- Credit history: Most banks require a personal credit score higher than 700 for an unsecured line of credit.
- Time in business: Most banks prefer to fund businesses that have been in operation for several years.
- List of assets: Although business owners don’t need to provide collateral for an unsecured line of credit product, some banks may still want to see a detailed list of your business assets.
- Tax returns and financial statements: Lenders look for healthy revenue because it helps them assess the likelihood that you’ll be able to repay the debt. They often set a minimum annual revenue, often between $100,000 and $250,000.
- Current and future projects: Some banks ask for copies of current contracts and upcoming projects to assess whether your business is capable of repaying the line of credit.
- Debt-to-income ratio: Lenders use this value to measure the business’s loan repayment ability. Each bank has its own criteria, but the lower the ratio, the better.
- Prior judgements or liens: Lenders may verify if there are prior judgements to assess the business’s history of repaying previous debts.
- Type of industry: Some banks demand stricter requirements or even exclude certain types of businesses in sectors with a high failure rate, such as restaurants.
- Business plan: Banks may need to see how the funds will benefit the business.
Essentially, banks are looking for reassurance that businesses can make monthly payments on their revolving line of credit. This means many businesses struggle to qualify because they don’t have sufficient income or trading history to meet the bank’s criteria.
Even when businesses with a strong credit history can meet all the criteria, gathering and organizing all the required documents takes multiple business days. After submission, banks require between two weeks and three months to review and underwrite loan applications, making them impractical for businesses who need to settle operational expenses quickly.
Nevertheless, traditional banks may be a good option for businesses with a healthy credit score, all the necessary paperwork ready for submission, and don’t need the funds urgently.
Revenue-Based Financing Companies Offer Easier and Faster Access to Unsecured Lines of Credit
A second option to get a revolving line of credit involves revenue-based funding companies.
In contrast to banks, applying for revenue-based financing has two main advantages:
- Easy qualification and application process: Revenue-based financing companies don’t have the same strict criteria as banks — they only need to see proof of a steady income with a few months of bank statements. This means businesses with a stable cash flow can easily qualify. No tax returns, balance sheets, cash reserves, or business plans required. Easier qualification also makes it possible to secure larger amounts. Usually, banks cap loans at 50% of monthly revenue, but revenue-based financing can reach 200%.
- Fast line of credit approval: Because revenue-based financing companies don’t have to underwrite all the paperwork that banks ask for, approvals are faster. In most cases, business owners can receive funds the same day.
Secure a Business Line of Credit from Redline Capital with Just 4 Months of Bank Statements
Redline Capital provides fast revenue-based financing for small businesses, including unsecured business lines of credit.
Unlike traditional banks, we don’t ask for many documents. Our focus is on your monthly recurring revenue and therefore only require four months of bank statements. Fewer documents mean quicker underwriting and funding, typically on the same day or the next.
To be eligible, businesses must:
- Earn at least $30K gross revenue per month.
- Have been in operation for 12 months or more.
- Be located in the U.S.
You can apply for our revenue-based financing products by completing a short online form with details like your desired loan amount, business type, intended use of funds, creditworthiness, and gross monthly revenue.
We send your application to various lenders and return to you, usually within an hour or two, with multiple financing options. Each offer outlines the line of credit amount, rates, annual fees, origination fees, and repayment term.
Once you accept an offer, you’ll receive a link to a client portal where your funds are held. You can withdraw as much or as little as you need into your business checking account and only repay the amount you withdrew.
If you don’t qualify for a line of credit, you may still be eligible for other business funding options. We’ll send you offers for alternative financing products you are eligible for, including lump sum cash advances, SBA loans or small business loans, term loans, and short-term working capital loans.
| Funding Features | Redline Capital Terms |
| Loan amount | $30K to $750K |
| Line of credit term | 12 to 24 months |
| Repayment terms | Monthly and weekly |
| Minimum FICO score | 600 |
| Minimum time in business | 12 months |
| Minimum monthly revenue | $30K |
You can also check out our case studies page to see what our clients say:
With Redline Capital, You Can Secure Better Deals Faster Than Applying Directly to Lenders
As a broker, we have over 15 years of experience helping businesses open business lines of credit. We can offer you better and quicker deals than if you were to apply directly to lenders, including traditional banks and other revenue-based financing companies. This is because:
- We have decade-long relationships with top business lenders and generate thousands of applications for them every year. In turn, they offer us better terms than direct applicants. Businesses that apply through us typically receive preferred pricing, exclusive discounts, and wholesale rates that would not be available if they had applied on their own. This is known as volume-based pricing power. By applying with us, you can take advantage of our deal volume to secure offers that wouldn’t otherwise be available to you.
- We close deals significantly faster than other lenders. The large volume of business we bring to lenders also allows our applications to be prioritized and completed faster. Some lenders have underwriter teams dedicated to us. In contrast, businesses applying directly to lenders often face longer wait times, as their applications are only processed after those submitted by brokers.
- We negotiate on your behalf by showing lenders the various offers on the table and asking if they can provide a lower rate. In addition, if your application is initially rejected, we may be able to negotiate with the lenders to help your business qualify. Lenders don’t do this with individual borrowers, but are more likely to do with us.
- We shop the market to find offers tailored to your situation. If you apply directly to a few lenders, you only see the offers available from those lenders. These may not be the best for your business; you might be unaware of alternative offers or how fair and competitive they may be.
- We eliminate the need to apply to multiple lenders. If you apply directly to lenders, you must submit multiple individual applications, which is time-consuming and involves significant paperwork (each lender has slightly different criteria, and you need to fill in multiple application forms). With Redline Capital, you submit one application and receive multiple offers.
- We work exclusively with reputable private business lenders, such as OnDeck, Credibly, Rapid Finance, Kapitus, and BriteCap. Because these lenders consistently offer competitive interest rates, we can get you the most favorable offers. In contrast, brokers who do not have the reputation or performance to work with premium lenders are relegated to using subprime lenders offering expensive deals. These brokers are unlikely to secure the best loan terms for your business.
- We always take a professional and respectful approach with our clients. We present you with multiple business financing options, and then allow you to choose what’s best for your business in your own time. Many brokers tend to lack professionalism, often bombarding you with calls to push you into accepting an offer that may not be the best for your business.
Read more: Top 5 Private Lenders for Business Loans & How to Choose
Get Approved for an Unsecured Business Line of Credit with Redline Capital
See if you qualify for an unsecured business line of credit with us by completing this short application.