A business line of credit is one of the best financing options available to small businesses whose intermittent cash flow causes budgeting issues. Problems with cash flow as well as opportunities for growth can be managed very effectively by having a business line of credit. This financing tool allows you to access funds up to a certain pre-specified limit, and pay off the balance in monthly installments. The main advantage of having a business line of credit is its extraordinary flexibility, because you can use it at any time and for any purpose, and as long as you continue to pay on the balance, it’s always available to you.
How a business line of credit works
A business line of credit would have to be approved by a lender that you work with, either a traditional lender like a bank, or an alternative lender. Business lines of credit can either be secured or unsecured, and when they’re secured, that means you have provided some type of collateral in exchange for being approved. An unsecured line of credit is more difficult to obtain, because it lacks any collateral backing, but is most often approved for businesses with very good credit history and for those which have stable finances.
In either case, once you’ve been provided with a business line of credit, you can access it at any time to purchase inventory, to meet payroll requirements, to pay business expenses, or literally for any other purpose you have in mind. Much like a credit card, at the end of the month, you would then pay back some or all of the money you used, to restore the balance on your business line of credit. As long as you continue to make payments on your line of credit, you will always have funding available to you for business purposes.
Would your business benefit by a business line of credit?
If so, contact us at Steadfast Funding Partners, so we can discuss some options which may be available to you. Nothing gives a business greater flexibility than a business line of credit, so almost all businesses would be much better off by having one.