Did you ever dismantle a toy or gadget to find out how it works? By learning how things work, you gain a better understanding and are then able to use them to your advantage. Therefore, you may need to know more about how a line of credit works at a bank versus alternative financing companies like Financing Solutions.
Finding what works for your business is no easy task. Through trial and error you slowly figure out the best sources of fast business financing. You should know that a business line of credit (LOC) can be a benefit to most small businesses. But before you decide on a line of credit, you first need to know how a line of credit works.
What is it Like to Get a Line of Credit from a Traditional Bank?
With banks, you apply for a LOC by filling out an application. Then they will run a credit check and then ask for a lot of documentation to support your application.
Additionally, a bank will require collateral to back up the LOC. Collateral is an asset like equity in a house, accounts receivable, stocks, and other liquid assets. The whole process can take 3-6 months and many times at the end of that time period, the bank will still reject your application for some arbitrary reason.
Although a line of credit may be easier to get than other types of small business loans, many entrepreneurs still cannot qualify. If you are one of the few that get an approval, you will have certain covenants that you have to meet like audited financials, AR vs AP ratios and other restrictions.
You will get a set amount of money you can use at any time. However, banks will charge you just to open the line, even if you don’t use it. You will have to make monthly interest payments as well.
A Line of Credit and the Financing Solutions Difference
When you apply for a line of credit from Financing Solutions (www.financingsolutionsnow.com) you will just have to answer a few questions on their website and you will know in 24 hours whether they approve your application and how much you are eligible for. No credit check is run until you decide to move forward by signing the offer letter.
They will ask for very simple documentation like a tax return, bank statements, etc. That’s all it takes. Your line is then set up and there is no charge until you use it.
At Financing Solutions, the owners are serial entrepreneurs who understand the challenges and stresses of running a small business. They know you don’t have a lot of time to fill out paperwork or run around town gathering information. As a result, they make it easy to get the quick business funding you need for working capital and growth. You can effortlessly renew your line year after year even if you never use the line making it a smart back up plan for emergencies.
Having access to cash on demand immediately is perhaps the biggest benefit of a Financing Solutions line of credit. When you don’t have to worry about where you will get cash to make payroll and handle daily expenses, you can focus on growing your business.
In addition, there is the possibility for an emergency to occur at any time. If you already have a line of credit to use for emergency business financing, you can handle things like taking advantage of high demand, equipment breakdowns, weather disasters or personnel changes. Every small business should have a line of credit in place, just in case.
