Yes, Line of Credit Depot works with many of the Nation’s best Small Business banks and some of our bank resources issue Credit Facilities for businesses that are not profitable. This is analyzed by the last filed business tax return. If there are losses under $100,000 as shown on the last filed tax return, the business can be approved for a revolving line of credit. If the losses exceed $100,000, the business will not be eligible. 

Even though most banks prefer to issue credit facilities only to businesses that are showing to be profitable, there are a handful of banks that offer access to lines of credit (not credit cards) even if the business is unprofitable. Since all banks have different baseline requirements the insight knowing which bank will approve your business is critical. That’s why our clients leverage our network of national banks 

The reasoning for most banks to only approve businesses that show profits on a tax return is because the bank is worried that the business will not be able to afford paying back the debt. If there are losses, the business is already losing money and would theoretically be unable to successfully satisfy debt servicing obligations. 

Our bank partners that approve ‘unprofitable’ businesses understand that reported losses to IRS doesn’t necessarily mean that the business is actually not profitable. Annual reported taxes are not a real financial picture of the business’s profitability, but more so a taxability indication overview. For example, if depreciation on business assets are realized on a business tax return, this can account for reportable losses, even though the business is technically profitable.

The best way to see if your business is approvable for a line of credit is to schedule a qualification call or to apply here. Line of Credit Depot has the knowledge and experience to get your business approved, often when others can't!

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