A business line of credit can help you grow your business in various ways. No small business owner can survive the rollercoaster of owning a company without adequate funding. When money is needed right away, a small business loan usually takes too long to get. Alternately, securing a line of credit is a much quicker process and doesn’t require the excellent financial credit profile demanded by traditional business loans.
Whether your company wants to invest in professional development or needs to cover unexpected business expenses, a business line of credit can help your business grow, especially when cash flow is an issue. Here are five ways a business line of credit can help your business realize its full potential.
Invest in Employee Development
With the country’s current labor shortage, engaging and retaining employees is a top priority for today’s employers. People would rather work for a company that values them and is willing to invest in their success. A recent Deloitte survey of millennials found that 71% of workers revealed they are likely to leave in the next two years because their leadership skills are not being developed with their current companies. Investing in employee development not only keeps employees engaged but also helps your business grow by building “promotable employees” and strengthening your internal workforce. Plus, the word can spread fast, making your company a desirable place to work.
A business line of credit can help fund employee development programs, such as:
- Continuing education
- Membership in professional organizations
- Skills training
- Trade subscriptions
- Seminars and webinars
- Attending trade shows, conferences, and other business events
Using a business credit card to pay for these expenses can increase the cost due to the credit card interest rates, which are much higher than the rates for a business line of credit.
Purchase a Better Facility or Office Space
As your business grows, you may need to move to a bigger (or better) workspace. But if you don’t have the money to move, it can mean lost opportunities to help your business grow. Crowded offices or small warehouse spaces lead to lost productivity and employee frustration. On the other hand, moving to a new space means you need the money to handle the expenses, such as transportation, landlord deposits, new utility fees, and more.
You may think you can just get a bank loan. But, typically, you must have a specific purpose in mind when you borrow money via a term loan. However, a business line of credit is there whenever you need it, including unexpected business expenses. As long as you stay within your credit limit, lines of credit can help cover temporary costs.
Cover Payroll Expenses
You can’t grow a business without help. But hiring employees means you are assuming the legal obligation to pay employees on time—no matter your financial circumstances. According to the Fair Labor Standards Act (FSLA), employers must pay all non-exempt employees their full salary and any overtime on their scheduled payday. In addition, when it comes to protecting employees’ rights, state laws tend to be even stricter than federal laws. FSLA violators might be sued by employees and the state or federal government. Penalties can be monetary and potentially include imprisonment for repeat violations.
Therefore, having the money available to meet payroll on time is essential for operating your company. And for seasonal businesses meeting payroll can be even more challenging. Knowing their revenue fluctuates, many seasonal business owners secure a business line of credit to ensure they can cover payroll expenses.
Purchase New Equipment or Software
Small business owners know they need the proper and latest technology to compete and grow in today’s crowded marketplace. Financing equipment, especially if you need it quickly, with a business line of credit is a good option because fewer credit requirements are needed, such as a personal guarantee.
Likewise, a business line of credit can help you buy equipment that can’t be financed, such as used or custom-made equipment. Sometimes, a buyer can even negotiate for a better deal because the business line of credit allows the business owner to pay cash.
If you are a retailer, making decisions about inventory is an almost constant concern. On the one hand, minimizing inventory keeps costs low. On the other hand, having more merchandise gives your company the tools to attract additional customers and meet their demands without scrambling to fulfill orders. If you’re looking to expand your product line, a business line of credit can buy you the inventory you need to help your business grow into new markets.
Whether you’re using your business line of credit to increase inventory, buy equipment, invest in your employees, etc., another advantage of a business line of credit is that it’s revolving credit, meaning as soon as the withdrawn funds are paid back, the money is available again, whenever the need arises. And you only pay fees when the money has been borrowed, and the business line of credit is there whenever you need it.
Apply for a Business Line of Credit Through Financing Solutions Today!
Financing Solutions is an alternative lender offering an easy application process (it takes less than two minutes to fill out) for a business line of credit and requires no collateral or documentation for a written offer letter. Other online lenders have a much longer application process and can be pretty expensive.
The founders of Financing Solutions have started and grown several companies together; therefore, they 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 or annual 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 by Better Business Bureau and Google. Some highlights include:
- There are no costs to set it up or keep it in place
- The easy 2-minute application online application
- If approved, you’ll receive a same-day, no-obligation offer letter
- The fastest setup—only 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 business 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.