Business lines of credit offer your company tremendous flexibility. This financing option is an often unsecured, revolving line of credit, which you can access as necessary. That means you’ll have renewable funds that you can dip into for daily operating expenses and more.

Business Line of Credit Basics

With a business line of credit, you can withdraw funds from your credit line through your business checking account, through a mobile app, or by using a business credit card. As you repay, that amount is replenished (added back into your credit line) and instantly available to you again (less the interest due). Interest accrues as soon as you withdraw funds and the rate is usually variable. 

To qualify, the lender may require that you’ve owned and operated the business for a specific period of time, that you show a profit, that you have good personal credit and more. A business line of credit is regularly reviewed by the lender to ensure your small business still meets the qualifications. The amount of the credit line is generally renewed each year, and the amount for which you qualify can change.

Options for Using Business Lines of Credit

You can use lines of credit for any short-term operating costs, including:

  • Managing your business cash flow 
  • Working capital for seasonal businesses (off-season funds) 
  • Meeting payroll 
  • Attending a business conference 
  • Buying inventory or supplies 
  • Purchasing equipment or tools 
  • Expanding your business

Advantages of Business Lines of Credit

Your business line of credit, kept in good standing, can: 

  • May require no collateral. Business lines of credit are generally unsecured debt, with no collateral required. However, if your credit line is large, for instance over $100,000, the lender may take a lien on assets you own or a CD (certificate of deposit). 
  • Help build a credit rating for your business. 
  • Qualify you for more favorable loan terms if you need a loan or business financing in the future. 
  • Offer lower interest rates than for a business credit card. 
  • Provide simple, quick access to funds. There’s no need to re-apply and wait for approval each time you need funds, as you would for a bank loan.  

Apply for your business line of credit today. Contact Simplicity Capital Finance now.