$1 Million Commercial Line of Credit
A $1 million commercial line of credit is a large, complex facility that falls squarely in the commercial banking category. At this size, lenders typically require extensive financial documentation, formal collateral, a strong multi-year operating history, and may require covenants or periodic financial reporting during the life of the facility.
Who qualifies at $1M
Businesses seeking a $1 million line typically have $3–5M or more in annual revenue, 5+ years in operation, strong credit profiles (personal 720+, established business credit), minimal existing debt relative to revenue, and tangible collateral (real estate, receivables, equipment).
Loan covenants
At this facility size, lenders often impose financial covenants — ongoing requirements to maintain certain financial ratios. Common covenants include minimum debt service coverage ratio (typically 1.25×+), maximum debt-to-equity ratio, and minimum liquidity requirements. Breaching a covenant can trigger technical default.
SBA vs. conventional at $1M
SBA 7(a) loans and lines cap at $5 million, making the program relevant at the $1M level. SBA backing allows lenders to offer more favorable terms (lower down payment, longer terms) to businesses that might not qualify for conventional loans. The trade-off is a longer, more document-intensive process.
Frequently Asked Questions
- How long does it take to get a $1M line of credit?
- Typical timeline is 4–8 weeks for a conventional bank facility; 60–90 days or more for an SBA program. Completeness and responsiveness significantly affect timing.