Business credit line is basically a loan that you can tap into , up to a certain amount set by the lender, whenever your business is in need of capital. Business credit line programs offer many different features in order to custom-fit to your business needs. Assessing just what those needs are is critical. For example, you may need immediate financing in order to make a seasonal purchase.
Consider the following benefits of having a business credit line:
- In most cases, the entire credit line is available as cash, and the same APR applies to both cash and purchases.
- A line of credit can be utilized to take advantage of a unique business opportunity or cover unexpected shortages of cash.
- There is the option to pay the balance in full or to extend payments over time.
- Interest is paid on only the accessed portion of the credit line, which is replenished as the balance is paid.
- A business line of credit also provides the ready cash needed to purchase inventory or carry accounts receivable.
Combine all of the above factors with a competitive interest rate and a business credit line proves to be an excellent vehicle for maintaining a healthy cash-flow and managing a successful business. Especially if you see your business may need extra cashflow in the near future to operate or expand. It is nice for your business to be able to have access to cash, whenever it needs it, and not have to worry about overborrowing. You only take out as much as you need at any given time.