What is a Revolving Credit Line
Article summary: The need to have access to quick business capital is universal for all businesses and for many the answer is a revolving credit line. If you need to know more about this business tool and how it may work for your company, read on.
The Basics of a Revolving Credit Line
A revolving credit line is either a line of credit or the amount of credit that a supplier is willing to approve you for. It is called a revolving credit line because you have permission to use up to a predetermined agreed amount at any time. Often, people will use their revolving credit line, pay it down and then use it again.
Every business should get a revolving credit line or line of credit because almost all businesses have ups and downs in cash flow. These ups and downs occur because of seasonality, surprise expenses that you did not budget for, decrease revenue, or a late check.
When a Revolving Line of Credit Might Not Make Sense for Your Business
There are times when a revolving line of credit may not be what you need. For example, if you are looking for fast business funding for a major purchase or for long term growth initiatives, a small business loan will work better for you. However, as long as the fundamentals of your business are good, and you make a profit, then you shouldn’t be concerned about using your line of credit.
On the other hand, if you are not profitable or you have a lot of debt, it’s unlikely that a lender will approve you for a revolving credit line anyway. This is not necessarily a bad thing.
If you are not profitable enough the best thing to do is reduce your expense immediately and work towards increasing your sales. Then, when your business is stronger, you should reapply.
How to Use Your Revolving Credit Line Most Effectively
Keep a manageable balance and repay it quickly. Your lender will then be more at ease. This will make it easier when it’s time to reapply.
Use it to establish a business credit profile. This will make it easier to apply for small business loans in the future without having to rely on your personal credit history as much.
Apply for a revolving credit line before you need it. That way, you are not left scrambling for emergency business cash at the last minute. This will prevent you from going into panic mode whenever you find yourself short on cash. No one makes smart decisions when they are under stress. Also, lenders are less likely to want to work with your business when you are desperate or in financial straits.
Get your revolving credit line now from Financing Solutions (www.financingsolutionsnow.com). When your business needs money fast, you don’t have time to shop around. You are too busy running your business.
With Financing Solutions, you can apply in two minutes. They will then email you an offer in less than 24 hours.
Most importantly, they do not run a credit check unless you decide to proceed, which helps to protect your credit. All in all, you can have the money you need in your account in about 2-3 days.