If you’re a small business owner, you may have considered different funding options for your company. After all, keeping adequate positive working capital on hand is essential to running a well-oiled machine and making long-term goals a reality. Sometimes, though, a traditional loan just isn’t the right route for your company, whether you don’t want to be liable for a pre-set amount or your company is simply too young to qualify. Thankfully, business lines of credit offer an alternative way to fund your company when you need it, up to a preset amount. To learn more about typical business credit lines and whether they could be the right choice for you, read on.
They Allow a Pre-Approved Amount of Funding
Similarly to personal credit cards, for instance, a business line of credit gives you the freedom to use a certain amount of funding up to a preset amount. The amount available to you is based on approval during your application process. The good news is that this means you can use it only when you need to and pay back only what you use. Unlike some situations that can arise with conventional loans, you won’t be stuck paying interest on funds you didn’t use.
They Provide Quick Financing
When your company needs capital quickly, you probably don’t have the time to go through a lengthy traditional loan application process. If you have a line of credit, however, you have a funding option already at your fingertips. This makes it one of the quicker financing avenues, compared to waiting for conventional loan approval.
It Can Have Countless Applications
With some conventional loans, you may be restricted in the ways you can use the funding. With a line of credit, however, you often have the flexibility to use the funding for whatever your company needs. If you have to cover payroll, upgrade equipment or order new inventory, for instance, you could potentially cover all your expenses with your credit line.
Running a successful business takes positive working capital, but securing cash isn’t always an easy task. Thankfully, alternatives to conventional loans like business lines of credit can offer financial aid when you need it, regardless of the reason. Whether you like the flexibility of only paying back what you need or want quick financing available at a moment’s notice, credit lines have several advantages for small businesses. With these facts under your belt, you can confidently decide whether a business line of credit is right for your company.