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Lines of Credit

Smooth out the bumps in your annual revenue cycle with financing that’s as flexible as you are. If you’re used to ups and downs in your small business, you know it’s not always easy to cover expenses during the slow months. That’s where a line of credit can give you a boost. Borrow working capital whenever you need to and pay it back when sales are strong.
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What is
A Line of Credit?

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A revolving line of credit is a lot like a business credit card account.

Work with a lender to establish a credit limit when you open the account. You’re allowed to pull from your line as often as you need to, up to your credit limit. Making payments into the account frees up the balance to be used in the future. Lines of credit are ideal for covering expenses when business is slow. Top up your balance when your cash flow is back to normal.

Lines of credit aren’t the same as credit cards, however.

Most credit cards are unsecured, meaning you don’t offer collateral to the lender. If you have valuable assets, you can use them to secure a line of credit that gives you a portion of that asset’s value. Say you have real estate worth $500,000 and want to secure a line of credit. Your lender may extend a line for 80% of that amount, or $400,000. Borrow as often as you need from the account, up to $400,000. As you pay down the balance, you can draw again on your available credit.

When you’re developing your company’s emergency plan, a line of credit can be an important component.

Keep a line open for emergencies so it’s always there to fall back on. Most lenders don’t charge interest on an open account as long as there’s no balance. So you can add it to your planning with minimal cost. Find out more by speaking with a broker today.

Revolving

A revolving line replenishes when you make payments, just like a credit card. But most lines have higher limits and lower interest rates than business credit cards. Access your line just as easily online, at an ATM, or through your lender’s location. Finally, financing that’s ready when you need it.
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Non-Revolving

Not all lines give you perpetual access to cash. Some have a set limit, and payments into your account simply go toward paying back the debt, not making it available for later. Once your account is paid off, it’s closed. Borrowers choose these accounts for their lower interest rates and monthly payments.
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Unsecured

Although many borrowers prefer to secure a line of credit using company assets, unsecured lines are also available. They typically have lower credit limits but don’t require real estate or equipment as collateral. To qualify; you should have a strong credit history, a bank account in good standing, and two or more years of financial history.
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What Are The
Advatanges

Flexible funding for your small business.

Reusable as often as you need cash.

Reliable for emergencies.

Lower interest rates than credit cards.

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F.A.Q.’s

Q. When is a line of credit not a good fit?
Lines of credit are great when you need to cover ups and downs in your cash flow. But if you need funding for a large purchase like heavy equipment or remodeling, other types of loans can be a better choice. We can show you hard money loans, term loans, and bridge loans that give you a non-revolving boost of cash.
Q. Is it hard to qualify for a business line of credit?
Qualifications depend on your lender and the type of line you’re looking for. Secured lines are easier to get because you can back up the loan with collateral. Unsecured lines are typically more challenging to qualify for if you don’t have a high credit score.
Q. What can you use a business line of credit for?
Lines of credit are most often used as working capital, to handle operating expenses. You can use them to pay for supplies, utilities, payroll, unexpected bills, or special projects. Let us know what your plans are and we’ll help you get a great rate on your financing.
Q. What are the risks of a line of credit?
Like any loan, it’s important to understand the terms and conditions before you accept the offer. If you’re unable to make timely payments, it could negatively impact your credit score. If you have a secured line and default on the loan, the lender can seize certain assets. We’ll help you understand your loan offers before you sign on the dotted line.

We help you stay in capital.

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