AMEX Business Line of Credit Review 2024 | Ecommerce Sellers and Small Business Friendly

Getting this line of credit is relatively easy, especially if you're an existing American Express small business credit card member. The minimum qualifications for this line of credit include, but are not limited to, you must be at least 18 years old, your business has to have been around for at least one year, you have to have a FICO score of at least 660 at the time of application, and you have to have a monthly revenue of at least $3,000.

So some of the fine print from the American Express website. All businesses are unique and subject to review and approval, so there's no guarantee that you're going to get this loan. The required FICO score might be higher based on your relationship with American Express, your credit history, and all that good stuff. And currently the American Express business line of credit is only available in the United States and territories. The best part is you may be pre-approved if you're an existing American Express small business credit card member.

1:00 Terms and rates

So let's talk about the terms. The loans come in four terms. You can get a 6-month, 12-month, 18-month, and 24-month loan. My understanding from talking with my American Express account manager is that these loans can be as much as $250,000, but your specific credit limit will vary. And again, I couldn't find this on the website, this was from a conversation that I had.

Because interest rates are going to vary over time and business, I'm not going to tell you the rates that I'm seeing, but I will tell you that these are some of the best rates that I'm seeing in the industry.

I applied for and was approved for this line of credit with two businesses. One is LedgerGurus, this business, which is a nine-year-old services business. The other is an ecommerce business that we started a year ago with the purchase of the assets of an existing business. Both have been using American Express business credit cards and I've been paying those off on time. With both businesses I have consistent revenues and profits, and I have good credit score. I was super surprised in how easy it was to get this line of credit and the amount of credit that I was able to get right out the gate.

1:26 Why this matters for ecommerce

Now LedgerGurus has worked with ecommerce businesses for years. Most banks don't like working with ecommerce businesses because they don't have buildings, they don't have equipment, they don't have all those things that you can secure a loan against. Most banks want to see you have a history of revenue, profits, and often a relationship over an extended period of time with them. Even then, they don't like the fact that a lot of ecommerce businesses don't have physical assets. Inventory isn't an asset in their mind because they have a hard time liquidating it.

So what happens is a lot of ecommerce businesses end up taking loans from Amazon, Shopify, PayPal, and these are very expensive loans. The American Express business line of credit is a great alternative to these options. It is a perfect tool for purchasing inventory. Plus, if you're an ecom business, it's very likely that you may already have an American Express small business credit card. You may be pre-approved.

2:33 The application process

So in terms of the application process, I went through it as an existing customer. It was super easy. I literally got my loans in like 20 minutes. It asks a lot of the standard questions you're going to get when you open a bank account or a credit card account.

So if you're an existing customer, to apply, log in to your account, you're going to click on your card, and you're going to see a thing called Business Blueprint. Click on that and that will take you to where you can apply for the loan. I'm also going to give you a link to apply in the description.

I can't speak to the process of applying if you're not an existing American Express customer, but I expect it would be fairly straightforward. From American Express's website, be prepared to provide the following. Verifying your business using your bank account, your name, your business name, your home and business address, your home and business phone numbers, your business tax ID. And be aware that your consumer and business credit reports will be pulled.

3:18 Taking out the loan

Now taking the loan out was very easy. Once I was approved, you pick the amount you're going to take out, you pick the term length, and then you're going to get a payback schedule with the fees baked in. Sign the loan agreement and the funds are deposited to a connected bank account in one to three days. Payback comes from the same account that you connect, so it's really easy to manage.

3:36 The benefits worth knowing

So let me talk about some of the other benefits, and these are incredible. If you haven't taken out a business line of credit before, you may not appreciate these, but you should.

No origination fees. No annual fees. No monthly maintenance fees. No application fees. No prepayment penalties if you pay back the loan early. This is awesome. No need to reapply every time you take another loan. Add to that, that loans are going to be reported to credit agencies, so you're going to build your business credit.

Let me tell you, you're not going to find many lines of credit that are this generous. If you're an ecommerce business, you should strongly consider this line of credit.

If you need ecommerce advice or accounting help, reach out to LedgerGurus with the link in the description. And if you found this video helpful, like it, ask me a question in the comments, share it, and subscribe to our channel for more content like this.