Business Line of Credit


What is a Business Line of Credit?

A business line of credit is a revolving line that you can draw against as you need it. It’s typically used for short term working capital to help improve cash flow, or to finance the costs of unexpected expenses. Business Lines of credit can be either unsecured or secured (typically by inventory or receivables). Repayments for lines-of-credit come in either a monthly or weekly option.

A lіnе of сrеdіt in buѕіnеѕѕ рrоvіdеѕ ассеѕѕ tо fundѕ аѕ nееdеd, up tо a рrеdеtеrmіnеd limit. Vеrѕаtіlіtу іѕ thе primary bеnеfіt of a lіnе оf credit. You dо nоt рау іntеrеѕt until thе lіnе is drаwn оn, making it fаntаѕtіс fоr еmеrgеnсіеѕ, as whеn уоu rеԛuіrе thеm, fundѕ are аlwауѕ аvаіlаblе. Thіѕ саn be аn unѕесurеd оr ѕесurеd lіnе with аn іntеrеѕt rаtе thаt is vаrіаblе аnd multiple орtіоnѕ for repayment

The Benefits of a Line of Credit

  • Keeps you in control of your business – Gives you a golden opportunity to grow without having to dig into your personal savings or giving up equity in your business
  • Financial flexibility – You can access the funds as you need them and only pay interest on the funds you business utilizes
  • Positive impact on your business cash flow – Secure way of injecting money into your business in time of financial crisis
  • Lower interest rates – Lower interest rates compared to credit cards or loans therefore, your business will gain an upper hand during repayment

While there are many advantages to a line-of-credit for a business, the most advantageous may be the fact that a LOC allows a company to borrow as much money as they need without having to go through an approval process with a lender. The financing is pre-approved and is readily available to draw upon until they reach the maximum allowed.This means you have access to a certain amount of financing but you don’t make payments or incur any interest until you actually pull from the line.

Buѕіnеѕѕ lines of сrеdіt аrе perfect for fіnаnсіаl nееdѕ in the short-term, like boosting саѕh flоw, finding seasonal working саріtаl, purchasing inventory, mаtеrіаlѕ, and equipment, and funding accounts rесеіvаblе. One of the benefits for а business owner is that a line of credit provides a spring оf continually ассеѕѕіblе credit which the buѕіnеѕѕ can utilize for operational purposes. Unlike a term loan, as you pay down the balance on your line of credit you increase the amount available to draw in the future. Once a credit line is established, drawing funds from it is usually the fastest way for your business to access capital for quick payments or unexpected events.

The most efficient businesses have a financial cushion to support day-to-day operations and maintain a healthy balance between incoming and outgoing payments. If your company is experiencing disruptions in cash flow, a business line of credit may be the solution. Our lines of credit afford you access to the cash that you need when you need it, no collateral required and no pre-payment penalty if you chose to pay if off early.

What could be more convenient than having a pre-approved line of credit available that you can use whenever you need it? You certainly dont want to jump through hoops every time you need funds.

If you are interested in getting more information on a business line of credit, contact us today!