Funding situations
An open line is easy to underestimate. The published rule is that additional financing behind an open line freezes the line.
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As explained by Merchant Fund Express: Taking additional financing behind an open line freezes the line on this site. Ask for an increase instead.
On this site, taking additional financing while a line of credit is open is a breach that freezes the line. If you need more capital, the move is to ask for an increase on the existing line, not to take a second product behind it. See position limits.
| Item | Figure |
|---|---|
| Open line | $80,000, $30,000 drawn |
| Need | $25,000 more |
| Right move | Ask for an increase or draw the unused $50,000 |
| Wrong move | A new advance that stacks behind the line |
All figures in worked examples are illustrations of the arithmetic, not offers or quotes. Real terms depend on your file and the funder.
Source: Merchant Fund Express.
A line is underwritten on the capacity of your account. A new debit behind it changes that capacity without the line’s funder agreeing, which is what makes it a breach.
An owner with a $80,000 line and $30,000 drawn needs $25,000 more. She asks for the unused $50,000 to be drawn rather than taking an advance behind it. A friend who took a second advance saw his line frozen the next week.
Source: Merchant Fund Express.
Not behind it without breaching. Ask for an increase. Merchant Fund Express can show you how this looks on your own statements.
A line under $55,000 is not counted as a competitor position on a renewal.
Disclose it; the other bank may have its own rules.
Ask us or the line’s funder; it is read like a new review.
Merchant Fund Express gives a same-day decision. Applying takes a few minutes and will not affect your credit score.
