Reasons to Apply for Business Credit Lines |
Posted: September 23, 2016 |
Growing a small business is one of the most rewarding experiences imaginable. Watching your idea and vision turn into a reality is an exciting time, but to continue to move forward, your business needs to have access to funds. If you’ve already secured the loans that you need and you’re looking for something more reliable, consider opening up a business line to gain access to flexible funding for everyday expenses. Make Affordable Payments With a conventional business loan, there’s little room for flexibility when it comes to payments. You have to pay the full amount on time, every time to avoid dealing with serious consequences. On the other hand, business credit lines have much more reasonable payment terms. You should still pay early or on time, but if your business is going through a bit of a rough patch, you can get away with making the minimum payment for a while until you’re ready to make bigger payments. This allows you peace of mind, since you’ll still be able to enjoy the inventory purchased without worrying so much about high payments. An Emergency Fund Small business owners are at risk of facing financial turmoil without an emergency fund. It takes a lot of capital to get a business off the ground, and even more for it to be sustainable for the long run. When you don’t have enough cash on hand to cover emergencies that might pop up from time to time, it can cause more stress than is healthy. To ease your mind, apply for a business line so you’ll always have a backup plan in the event that you need to quickly mobilize funds. Enjoy Low Interest Rates Business credit lines are different than traditional credit cards, and they usually have a lower interest rate. When you buy supplies that you won’t be able to pay off for a few months, you won’t be hit with high interest rates that come with standard personal credit cards. Get Approved Quickly When it’s time to borrow money for business reasons, most people immediately jump to start looking at loans. While loans are certainly helpful in some situations, they’re not ideal for every situation. The loan process itself is extremely taxing and it can take a while to hunt down all the necessary documents. Even when you’re organized and have everything ready, loan approval can take a while, leaving your startup to flounder. When you’re ready to gain access to money and you want to skip the approval process that comes with a loan, seek out a lender that offers a business line. Ask how long the approval process takes, as it can vary from 24 hours or less to up to several days or weeks. Boost Your Credit Score Similar to your personal credit score, your business also has a credit score. You want to have a high credit score to prove that your business is trustworthy, so start small with a business credit line to get established. After routine early payments in the correct amount (or more than the minimum payment), you’ll begin to gain a positive reputation in the eyes of the credit bureaus.
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