Perhaps a business line of credit is the optimal choice.
A new business faces its biggest challenge early on – getting started. Other times, businesses face the need to grow, expand, or operate more efficiently after they’ve already been established. Whatever stage the business is in, it needs one thing to survive: capital.
There are different ways for businesses to obtain and grow capital. In a typical case, a business will turn to the bank to seek financing. Within bank financing, there are more options than traditional term loans, which, in many cases, is the simple solution.
With a traditional term loan, the business borrows a specific amount of money to which they are required to pay back both principal and interest on monthly basis for a set period.
This is ideal for long-term investments.
However, there are many cases where a traditional term loan just doesn’t make sense.
Many businesses face short term challenges and expenses. Whether it’s payroll, acquiring inventory, or purchasing supplies -- When these things happen, there’s a better solution – a business line of credit.
A business line of credit can be revolving.
This means that the borrower can spend the money, repay it, and spend again when needed, in a cycle that, in theory, never ends.
So, what makes a business line of credit so great?
Accessibility – borrower can draw funds up to the maximum amount at any time
Flexibility – borrower can use cash for multiple purchases or expenses
Payments – borrower is only charged interest on the funds withdrawn
Interest rate – while sometimes lower than a traditional loan, almost always lower than other unsecured loans i.e. credit cards
What’s the downside to having a business line of credit? Perhaps there isn’t one. Businesses just need to have the discipline to use the funds appropriately.
Practical, flexible, affordable, and convenient. A business line of credit – perhaps that’s the answer! Give us a call today to see if a business line of credit would work for you!