What's different about a Spotcap line of credit?
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It’s your business, so you choose how to use the funds. Our credit lines are a versatile solution for both long- and short-term activities.
Qualification and eligibility criteria
What we look for in applications
How does a business line of credit work?
Below is an example of Spotcap’s approach, focused on simplicity and flexibility
How does a business line of credit work?A business line of credit is a financing arrangement where you can borrow cash several times until you reach a fixed credit limit. Many business ventures come without a clear price tag, and a line of credit gives you the option to adjust how much funding you commit to.
Is a line of credit right for me?If you find yourself in a position where you need ongoing access to funds, a credit line could be a good fit.
When business is growing, you might not always be able to predict when expenses will come and how big they’ll be. For example, when the busy season is in full swing, you might need a few extra inventory orders to keep your shelves stocked — a credit line could cover the unexpected costs.
A credit line could also act as a safety net against nasty surprises. If a big customer invoice gets delayed, you could use the funds to keep your cash flow healthy and tide your business over until the payment comes in.
How long can a line of credit last?Provided you draw down within the first three months (what we call the “commitment period”), a Spotcap credit line can last up to 24 months. If you decide not to withdraw any funds during the commitment period, but later need access to finance, you can quickly and easily apply for a rescore with your basic information already pre-filled from your first application.
How much can I borrow?Our credit lines can extend between $10,000 and $500,000 depending on your individual circumstances. You decide how much to withdraw from your credit limit, and interest is accrued only on the funds you’ve actually used. For example, if your credit line limit is $300,000, and you withdraw $250,000, you will be charged interest only on the $250,000.
What should I consider before applying?Revolving & non-revolving credit lines.
With revolving credit lines, you repay the borrowed amount and automatically get access to the funds again.
Non-revolving credit lines don’t automatically get renewed — once you’ve repaid the borrowed sum, you need to request a rescore. While this might seem more time-consuming, non-revolving credit lines usually come with a higher credit limit.
Note: Spotcap’s credit lines are non-revolving. Applying for a rescore can take less than 15 minutes, and we come back with a decision within one working day.
Differences between a business line of credit and a business loan
Business loans provide a lump sum that needs to be repaid within a set time. They often give you access to more funds compared to a credit line, and have a clearly structured repayment schedule.
The tradeoff comes down to flexibility — if borrowers decide not to use all of the funds from a term loan, they will still be charged interest on the entire loan amount. With a credit line, interest is charged only on what the borrowers have drawn down, not the entire credit amount.
Credit line amount
Credit lines are a flexible alternative to business loans, but their credit limit might not provide you with enough funds for a more substantial investment (e.g. $500,000 and over). If you are looking to finance a long-term commitment, like purchasing property or high-value equipment, a credit line might not be the best fit. Consider talking through your options with a certified financial professional who can take your individual circumstances into account.
What are the costs of borrowing from a line of credit?There are no monthly servicing fees.
There are no early repayment fees.
There are no application fees.
The cost of financing with us includes the loan’s interest rate — which is based on your risk profile — and a drawdown fee that is charged per withdrawal as a percentage of the borrowed amount. Interest is charged only on what you have drawn down, not the entire credit limit. Click here to learn more about our pricing.
What documents do I need to apply?We ask for three types of documents:
BAS returns for the last 4 quarters Balance sheet for the last 2 years Profit & Loss statements for the last 2 years
If you’d like to learn more about the information we ask for in your application, have a look here.
Can I talk to someone about the credit line before I apply?Our customer support team is happy to help with any questions you might have. Give us a call at 1800 10 70 10 — we’re open from 9:00 am to 6:00 pm.
Business loan calculator