When opportunities arise, time is of the essence to act. When emergencies happen, capital is being lost until the problem is fixed. Spending time looking for the financing needed is time, and money, lost. Having a business line of credit in place allows you to leap into action! It is like having money in a safe ready to access when needed.
What is a business line of credit?
A business line of credit is a pre-approved amount of credit that you have access too. When funds are needed, you are able to draw on your credit line. Interest is only paid on the amount of funds you are using. Interest is not paid on funds not being used.
Having a business line of credit is similar to having a credit card. Let’s say you have a credit card with a $3,000 limit. As long as you are not using any of the $3,000, then you do not pay any interest. Now let’s say you make a $1,000 purchase with your credit card. The $1,000 is readily accessible, and now you pay interest only on the $1,000 you accessed. And you still have $2,000 available to use if and when necessary. Once you pay back the $1,000, your credit line returns back to the original $3,000.
When used wisely, a credit card can be a useful and powerful financing tool. It is a credit line, or money, instantly available when the need arises.
Similarly, once you have a business line of credit account setup, you have money readily available to be used to care for business needs. Opportunities, emergencies, buy new equipment or replace failed equipment, take advantage of inventory discounts, seasonal needs.
Be Prepared with a Business Line of Credit
How many opportunities has your business passed up due to not having ready cash available? How much down time did you experience the last time you searched for financing the last time equipment broke down?
Having a business line of credit in place, you are now ready to act when an opportunity or emergency arises. Scrambling around for capital when you need it now will cost you time and money, and add to your risk and stress.
- Not a business loan.
- Pay interest only on money being used, not the total amount available.
- Money available when needed.
- Saves money by minimizing down time when emergency arises.
- Gives the ability to act quickly to take advantage of opportunities.
- Apply for one before capital is needed.
- No collateral needed.
- Great credit score not necessary.
- Most business types qualify.
- Ability to take out separate drafts.
- Must be in business for at least 6 months.
- Must average $10,000/month in gross sales.
Be prepared and make a difference in your company’s future.