Business Line of Credit

As a small business owner, having access to additional capital is never a bad thing. A business line of credit gives you the ability to use funds out of what your normal operating expenses allow. Similar to a checking account, you don’t have to use all of your funds at once. Instead, you can use what you need to, when you need to and save the rest of your funding for a later date. This corporate line of credit is not only extremely useful and easy, but also provides business owners with peace of mind, knowing that they have extra cash if they ever need it.

The advantage to a line of credit lies in its flexibility, giving business owners the best of both worlds. Borrowers can request a certain amount, for example, $5,000, but are not under any obligation to take or use that entire sum. So, if the borrower only needs to access $2,500 of that agreed upon maximum, they can, with half of the balance remaining for use at a later date. The applicant also has more flexibility than a loan in the repayment of the fast business funding, often given the option to make a minimum monthly payment or to pay off as much of the line as they would like.

Most lines of credit are revolving accounts, and no, that doesn’t mean that your head will spin in circles. A revolving line of credit simply means that the borrowing and replenishing of the account works like a giant circle. A merchant can draw from the account at any time until the maximum amount is reached, and when repayment is made, the merchant can then apply for a replenishment of their business line of credit. This allows them to fund accordingly in the event of equipment repairs, unforeseen damages or simply to add needed working capital in preparation for a busy season.