Commercial Line of Credit

A commercial line of credit is a lifeline for many small business owners and is a common financial supplement for businesses with short-term gaps in their cash flow.

Thanks to global connectivity, people from all walks of life can pursue their passions and turn them into a livelihood with the help of some capital to keep the business moving. Business lines of credit are one such tool that can help with cash flow.

But what is a commercial line of credit, exactly?


What is a commercial line of credit?

A line of credit (LOC) is a flexible type of loan with a pre-approved credit limit that a borrower can draw funds from multiple times so long as they repay an agreed-upon amount plus fees within a certain period. The borrower can draw down from their line of credit, pay back what they owe plus fees, and then borrow again as necessary.

Business lines of credit are ideal for small businesses, and Prospa offers commercial credit lines alongside traditional short term business loans. As a leading small business lending specialist in New Zealand, Prospa helps a range of small businesses manage their cash flow and business expenses every day.


Prospa helps small businesses succeed

Prospa’s Business Line of Credit allows approved business owners to draw from their approved limit based on what they need, when they need it, and only pay interest on what they use.

Supporting small business owners is at the heart of Prospa’s vision, offering flexible funding options to business owners who need a helping hand in gaining ground and growing their revenue. We were awarded the Excellence Award by the New Zealand Mortgage Award in February 2022 for leading the way in supporting small businesses.

Find out more about Prospa’s business finance options here.


How a commercial line of credit helps your business

We’ve talked about managing your business’s working capital to assist with financial growth. We’ve also discussed the challenges that small businesses may face with cash flow.

If you’re a small business that’s experiencing financial difficulties, it’s important to take steps to improve your working capital. One way to do this is to find ways to reduce your expenses. Another way to improve your working capital is to increase your sales. However, if you’re having trouble doing either of these things, you may want to consider getting a line of credit.

Prospa offers lines of credit specifically for small businesses. We understand the challenges that small businesses face, and we’re here to help you grow your business. Our line of credit could be an alternative to help address your business’s invoice finance needs right away.


Features of the Prospa Business Line of Credit

Prospa’s business line of credit has many features that make it an attractive financing option for small businesses:

  • Line of credit facility limit between $2,000 and $150,000
  • Use and reuse as often as you like, with an initial term of 24 months
  • Only pay interest on the funds you use
  • Set up single and recurring payments using the online portal
  • Apply in as little as 10 minutes with minimal paperwork
  • Fast decision with funding possible in 24 hours
  • Dedicated business lending specialist
  • No asset security required upfront to access Prospa funding up to $150,000

If the above features pique your interest, apply now!


How Prospa’s Line of Credit could help you

For small businesses aiming to grow their income, the lack of a cash flow safety net could be a real challenge. A commercial line of credit can help smooth out cash flow and enhance business stability.

You can use a Prospa Line of Credit for different business purposes, including the following:

  • Paying unexpected or one-time expenses
  • Bridging the gap between paychecks
  • Urgent stock purchases
  • Marketing campaigns
  • Paying staff wages


Applying for a Prospa business line of credit

Whether you’re expanding your business, improving your product line, or just need help managing your cash flow, a line of credit can give your business the boost it needs. To qualify for a Prospa Business Line of Credit, you must fulfill the following eligibility criteria:

  • You must be a New Zealand citizen (or permanent resident).
  • You must be over 18 years and own a New Zealand business (with a valid NZBN/IRD).
  • You must be able to demonstrate  6 months of trading for a new business (or 3 months if you have purchased an existing business)

A commercial line of credit is a flexible and practical way to maintain cash flow for your business expenses. Prospa is there for small businesses, and we believe that they should have options for any financial help that they need.

Prospa also offers other business lending options. For enquiries regarding a business loan or line of credit most suited for your needs, visit our Contact Us page, or get in touch via email ([email protected]) or phone (0800 005 797).

Why Prospa? Because we support small business.

No more compromising or missed opportunities with Prospa by your side. This time tomorrow you could have access to funds for growth and cash flow support. It’s just what we do. We’re New Zealand’s small business lending specialist.

Talk to a business lending specialist

Talk to a business lending specialist

Talk to a business lending specialist

Talk to a business lending specialist

Talk to a business lending specialist

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There are two types of business lines of credit: unsecured and secured. Each is differentiated by its asset security requirements.

Unsecured lines of credit do not require collateral but may have higher interest rates or fees, while secured lines of credit require collateral and have stricter requirements but compensate by offering higher pre-approved facility limits.

Commercial or business lines of credit are revolving loans intended for supplementary cash flow or credit to cover business costs. They offer flexibility, they are useful for businesses that have ongoing expenses or need to make large purchases and they can be used as an emergency fund.

Other questions? Talk to a specialist