How To Benefit From Business Lines of Credit
Business lines of credit are an amazing way to grow your business. They’re easy to apply for, and they have virtually limitless uses. A business line of credit functions similarly to a company credit card, but its benefits typically go beyond what a credit card can offer.
The Benefits of Revolving Business Lines of Credit
Here are a few things that make a line of credit an incredible tool:
- Emergency funding: Unexpected cash flow problems can show up at any time, even for companies that have been in business for a long time. For example, some customers take a while to pay, or unexpected disasters can cause damage to your inventory. No matter what kind of expenses pop up out of the blue, business credit helps you weather the storm without issues, giving you money to pay rent, send inappropriate taxes or purchase the inventory you need to keep running.
- Capital for expansion: Credit is a big help when it comes to investing in business growth. You need capital to take care of renovations, equipment purchases, hiring needs, marketing costs, inventory orders and other essentials for reaching more customers. Any time your company needs to invest funds in order to drive growth, business lines of credit are right beside you to help.
- Better pricing from suppliers: Having access to significant funding is a big help when it comes to buying inventory. Many suppliers offer hefty discounts when you purchase a certain amount of goods or pay upfront in cash. With credit always available to you, qualifying for these better pricing tiers is easy since you have the capital needed for larger purchases.
- Excellent interest rates: Revolving business credit has company-friendly interest rates. In fact, as long as you have an excellent credit score, you may only pay a little more than the prime interest rate reserved for long-term loans. Even better, with a line of credit, the lender only charges you interest on the actual amount of funding used for purchases. As soon as you repay this amount, you no longer have to pay interest.
- Versatile funds: No one tells you how you use business credit. It’s totally up to you. You don’t need to submit proposals to the bank for approval or ask for authorization. If you see an opportunity to grow your business, you can take it.
There are many reasons why owners love having access to a line of credit. The versatility of this type of financing makes it a must for startups and established companies alike.