What Are the Benefits of a Line of Credit
The benefits of teamwork are that it divides the work and doubles the success. If we plant trees, the benefits go to the next generation. But what are the benefits of a line of credit for your business?
Being a small business owner is hard work so it’s nice to find a silver lining through all those clouds. One such discovery is the benefits of a line of credit. Once you learn more about this vital business tool, you will wonder how your business could exist without it.
Top 4 Benefits of a Line of Credit
- You get a source of fast business cash that you control.
When you get a business bank loan, there are numerous rules and restrictions. The bank gets to dictate what you can spend the money on and when you have to pay it back. Your application must state the purpose of the loan and you can’t use it for anything else. For example, you can get a loan to take advantage of an expansion opportunity. However, if you have financial difficulties a few months down the road and can’t make payroll, you cannot use your loan to help you.
In addition, you have to start repaying the money almost immediately. The bank will expect you to adhere to their strict repayment schedule, whether you actually have time to begin using the money or not.
One of the best benefits of a line of credit is that you get to decide when and how to use it. You can withdraw cash at any time. Also, if you don’t have a plan for how you will repay the money, you don’t withdraw any. This is great since you only have to repay what you take out.
- To help even out cash flow.
Small business can seem like a roller coaster with all the ups and downs. You can be flying high with sales one month and struggling to pay bills the next. This may lead you to sacrifice other areas of your business or missing out on growth opportunities.
If you have a line of credit, that doesn’t happen, even during slow sales cycles or account receivable gaps. Therefore, you don’t have to take money from your inventory budget to hire more people, etc. When you are low on cash but still need to handle daily expenses, use your line of credit. Then, you can pay it back when the money comes in from your clients.
- When emergencies happen, you can be ready.
Equipment breakdowns, vehicle mishaps, and natural disasters can occur at any time. If you do not prepare ahead of time, you are at the mercy of the unexpected. Unfortunately, many small businesses don’t have the financial capacity or cash on hand to deal with something like this. As a result, they must close their doors and go out of business.
A line of credit can prevent all that. You will always have a supply of cash to manage whatever life throws your way.
- You can easily get a line of credit from Financing Solutions.
Unlike other forms of fast business funding, it’s easier to get a line of credit. This is especially true when you go to Financing Solutions.
At Financing Solutions, you can get an unsecured line of credit in place in 48 hours or less. You can start right now. Begin by answering our 10 question application and you will be on your way to financial freedom.