5 Signs Your Company Needs a Small Business Line of Credit
Small business owners face many financial challenges while running their businesses—challenges where a small business line of credit can make a crucial difference. Here are five signs your company needs a small business line of credit.
Your Business is Rapidly Growing
Running a business with sudden accelerated growth is a good problem to have, right? Not necessarily. Experiencing rapid growth can be as fraught with dangers as not growing at all. Having a sudden influx of business could lead to:
- Losing control of your finances. Small sales are easy to keep track of, while sudden spikes in revenue can be complicated.
- Making cash flow mistakes. When income increases, spending often does as well, which can lead to overspending.
- Misjudging sales fluctuations. Is your sales growth permanent or temporary?
- Disorganized operations. With so much going on, trying to fulfill sales, etc., once-routine tasks (like invoicing or paying bills) can easily fall through the cracks.
- Over hiring. When times are good, you might be tempted to hire to keep up with demand, only to find yourself short of cash when it comes to payday.
To be prepared for situations like these, look into getting a small business line of credit, which is a short-term loan solution that offers you a cash backup plan when your company’s checking accounts are lacking. Plus, with a business line of credit, you only pay interest on the amount you withdraw until you pay it back.
You Need a Financial Safety Net
Typically, traditional term loans, such as small business loans or SBA loans, come with spending restrictions and a long-term commitment to paying the loan back by making monthly payments. For everyday expenses, such as covering operating costs, having a financial safety net, like a small business line of credit, is a smart idea.
Like credit cards, small business lines of credit are revolving credit. Borrowers are approved for a preset lump sum of money they can use for their working capital needs in any amount up to the credit limit. Then, borrowers make payments until the withdrawn money is paid back and only pay the interest rates on the borrowed sum. Once the money has been repaid, the money is available to borrow again.
Your Business Has Cash Flow Issues
Cash flow is the lifeblood of your company. Money paid to your business for products and services generates most of the cash flowing into your business. Cash flows out of your business when you pay your expenses, such as utilities, office rent, payroll, and credit payments. However, most business owners quickly realize it may take longer for your invoices to get paid than you expect, leaving your business savings account with a lower balance than the bills coming in. Then, if your company has seasonal ups and downs, cash flow can be a constant challenge. And a small business line of credit can be the perfect solution.
A small business line of credit is a constant coffer of money available for as long as the loan terms. Pay the money back, and the entire sum of the loan is available to you again without having to apply for a new loan, which can be very handy when your cash is unexpectedly drained.
You Plan to or Are in the Process of Acquiring a Business
Acquiring a business takes time, planning, and, most of all, money. While you may need a bank loan to cover your initial costs, if you don’t have a long credit history, which can give you an impressive credit score, getting a loan is near impossible. A small business line of credit is a good alternative, giving you access to the cash needed for acquiring a new business. Most small business lines of credit don’t require a high credit score, and approval times are much quicker than a traditional bank loan. Plus, a business line of credit can improve your credit score if you make payments on time.
You Need More Inventory
Finally, a small business line of credit can be crucial for the business owner looking to buy inventory—especially if there’s a time-lapse between the sale and the payment. In addition, the uncertainty of supply chains today has spurred some business owners to stock up on inventory, which puts a heavy strain on cash flow.
A small business line of credit, ready to be used whenever the inventory is available, is an intelligent solution that can help you buy the inventory you need and avoid the financial drain big purchases sometimes cause.
Fill Out an Application for a Business Line of Credit Today!
Financing Solutions is an alternative lender offering an easy application process (it takes less than two minutes to fill out) and requires no collateral or documentation for a written offer letter. Other alternative lenders have a much longer application process and can be pretty expensive.
The founders of Financing Solutions have started and grown several companies together, so we understand how important it is to keep costs low. That’s why we don’t charge you to set up the credit line, and there are no maintenance fees. We don’t ask for personal guarantees, and applicants can receive a no-obligation offer letter the same day. We make approval decisions based on our decade of experience working with small businesses. Find out today why we have five-star ratings from the Better Business Bureau and Google. Also:
- There are no costs to set up the line or keep it in place
- There’s an easy 2-minute application online application
- If approved, you’ll receive a same-day, no-obligation offer letter
- The fastest setup, 48-72 hours
- Once you have the line of credit, requests for funds are wired to your bank in minutes
- You can use your line of credit whenever needed
- Inexpensive when used (low fees)
- There are no restrictions in place or collateral required
- No personal guarantee is required, either
- Financing Solutions is a leading provider of lines of credit
- We are a reputable company with an A+ & 5-star rating
- You can pay off the line whenever you are ready
- The credit line is easy to renew and renews yearly
- You have a secured account portal access 24 x 7
A line of credit is a good funding resource that’s available whenever your company needs it, without the heavy burden of term loan requirements. If you want to see if your small business would be approved and for how much, please fill out the no-obligation, 2-minute line of credit application here.