What is a business line of credit?
A line of credit gives you access to funds up to a set dollar amount, allowing you to draw what you need with flexibility. This financing tool allows you to draw up to your limit and pay off the balance on a continuous basis. The key feature of this product is flexibility in which you can draw at anytime, to use for any business purpose, and you can reuse next time.
Applying for a Business Line of Credit: Common Reasons?
Whether you’re just starting out or you have an established company with a strong history, there are many reasons why you may wish to apply for a business line of credit. Lines of credit provide money for:
- Funding start-up cost
- Paying off bills from recent launch
- Employee payroll
- Covering accounts payable when cash flow is slow
- Launching new products
- Seasonal campaigns
- Purchasing new equipment to improve business
Planning for future improvements, it’s important to have a clear strategy on how you’re going to use your money obtained from the line. Banks are not interested in lending to companies with only vague notions of how the funding is going to be put to work. They want to ensure that their investment in you and your business is creating growth within a company so that they can be assured of repayment. With this in mind, it is important to have a detailed business plan to emphasize how you will best utilize the funds.
Applying for a Business Line of Credit?
When seeking financing for growth or to cover gaps in cash flow, small businesses have an easy pathway to funding. Business lines of credit are easier to access, and quicker to apply for and have friendlier terms for repayment.
Lines of credit work with a credit card, allowing you to borrow against a set amount as needed and only requiring interest payments on the money you use. The credit line assigned acts as a rainy-day fund for your business needs.
Why a Business Line of Credit Makes Sense:
Having quick and easy access to funds can be a game changer for any small business. A business line of credit is perfect for businesses with seasonal sales cycles and monthly cash flow fluctuations. It’s also ideal for businesses that typically have unpredictable, or “wavy” cash flow, or need to invest in their business to grow. A Business Line of Credit can be a powerful tool in your company’s arsenal that will help you achieve growth and success.
Qualifiers for a Business Line of Credit:
- Pricing .05%-1%
- Origination fee due up front
- 680 FICO and above
- G.A.S 3 million minimum
- Positive AR & AP report
- Lines of credit up to 12 million
- Minimum five years’ time in business
Funding from Premier Business Lending:
Premier Business Lending being your preferred Lender, our team has been able to help with cash flow for a few different companies with a Business Line of Credit.
We were able to facilitate a Logging Company in Oregon with a $250m amortized over 5 years with prime plus 2%. Another Line of Credit Premier Business Lending was able to facilitate was a Fitness Company out of San Francisco for all their equipment that has a $200m Line of Credit for operating coast with a $500m credit for equipment.
Premier Business Lending takes pride in their clients and always makes sure to guide the client in the correct direction. This also opens doors for repeat clients and long-term partnerships. As that’s what Premier Business Lending strives for on a day to day bases.