Companies That Offer Working Lines of Credit
One brilliant piece of advice that is often given by financial experts is that every business, large and small, should have a working line of credit, but first you need to find companies that offer it. There are no limits to how successful your company can be but unfortunately there are a limited number of companies that offer a working line of credit.
Wanting to be successful is a dream but actually working hard to achieve it is what makes you a thriving small business owner. Those that do their homework, stay relevant and make smart choices, like having a working line of credit, are the ones who do well.
The Difficulties of Getting a Working Line of Credit
It can sometimes be difficult for small businesses to get a working line of credit. There are often numerous obstacles in the way.
Traditional lenders have very strict criteria that they use to judge whether a small business is worthy of a working line of credit loan. They will look at everything from your assets to your credit history and if these things are not up to their standards, you will be denied. In actuality, most small businesses do not have what it takes to qualify for a loan to establish a working line of credit.
The Definition of a Working Line of Credit
You can think of a line of credit as being similar to a credit card. Basically, a bank or lender will give you a set amount of funds that you can draw on when you need it. You can borrow from and repay the money repeatedly over time so that you maintain your line of credit cushion.
Like a credit card company, the lender will charge you interest on the money you use. A working line of credit is different from a traditional loan because typically there is no fixed repayment schedule and the terms are more flexible.
When you run a small business, you know that the amount of cash you have on hand is directly related to how much you are able to achieve. With cash, you can make payroll, handle bills, pay business taxes and take advantage of opportunities to grow your business. Without it, you may have to resort to taking money from other areas of your business to manage daily tasks and negotiating with creditors.
The worst case scenario is that you have to close up shop because you have simply run out of money. Statistics show that running out of cash is one of the leading reasons that more than half of small businesses don’t make it to their fifth anniversary. Having a working line of credit is like retaining an emergency stash of fast cash on the side to ensure this never happens.
It is important to remember that a working line of credit should not be a substitute for a solid financial plan. Instead, you can use it as just one component of your existing money management and budgeting program.
A working line of credit is especially beneficial for businesses that experience account receivable gaps, those that are seasonal in nature, and for companies that may have numerous variations in monthly expenses. This business tool is necessary for the unexpected occurrences that can affect any small business and cause a temporary cash flow shortage.
Finding Companies That Offer Working Lines of Credit
Every small business owner knows that you need to have money set aside so that anytime you are experiencing a cash flow shortage, you still have enough funds for operating expenses and your company does not go under. However, this is difficult to do when you are always focused on simply surviving the month.
The best thing you can do for your small business is to start right now in establishing a working line of credit. You are more likely to be approved for a working line of credit when your business is healthy and strong.
An alternative lender is usually a wise choice for small businesses looking to find companies that offer working lines of credit. Many of these funding sources are more lenient when it comes to things like previous bad credit.
You can also turn to cash advance companies, like Financing Solutions (www.fundmypayroll.com) for your working line of credit needs. With a cash advance company, there is minimal paperwork and quick approval, so you can get the fast cash you need in a day or two.
In addition, you will be able to repay the money in a few short weeks or months, not years. Best of all, you will have peace of mind that your business can thrive and survive through any rough patches.