Line of Credit
Line of Credit
Business opportunities through flexible funding.
What is a line of credit?
An unsecured line of credit can be what you need to have quick access to funds and easy repayment terms when needed. It works just like a credit card in that you are able to borrow and withdraw money at will, up until your maximum limit.
Interest only begins charging on the amount taken out once it exceeds your total balance, but then as soon as payments are made, your original line of credit limit is restored without fail (just like a regular bank account).
How does a Line of Credit Work?
A line of credit works very differently to other types of lump-sum payments. Rather than receiving the whole amount at once, you’re simply provided with a cash account buffer.
It’s entirely up to you how you’d choose to make your withdrawals: a little bit here and there, a few larger lump sum payments as and when they’re needed, or the entire sum at once – though if you do have plans to withdraw the full amount, you may consider a merchant cash advance instead.
The line of credit will allow you to withdraw from the cash balance as and when you please, until the whole balance has been depleted.
Why choose a Line of Credit?
A line of credit provides borrowers with the most amount of flexibility over how and when they receive the cash advance. This lending option can create a helpful safety net or provide you with the means to make gradual adjustments to the way your business operates.
When you receive a large lump sum, it can be incredibly tempting to spend the whole amount at once. It’s not necessarily a bad thing – we’ve all been there! With a line of credit, you can withdraw what you need, when you need it. This might save you from spending the whole balance at once, freeing up some money for later use. Not only could this significantly help the business, but it might just give you that buffer to sleep at night since you won’t have to worry about not having money to pay your expenses.
Similarly, a line of credit agreement is incredibly useful when you know that you’re ready to expand your business, but you don’t quite know how. It will give you the option to make changes as and when they are required, rather than forcing you to commit to one large up-front payment.
Another great reason to use a line of credit is that it can be used for marketing or other regular services – you can plan your campaign spending based on the success of the last round of funding, either allocating more or less money to tailor your results! Depending on the business, this could allow you to capture that big client, take on that big project or even generate additional revenue quickly.
How much can you borrow?
If you’re planning to take out a line of credit, you can borrow anywhere up to $500,000. It isn’t as high as some of the other forms of lending we offer, but you do benefit from much greater flexibility as a compromise.
Currently, there isn’t a minimum amount of money you can borrow, as it’s largely based on individual business requirements.
When will you get the funds?
You’ll be able to start withdrawing from your line of credit within 72 hours. After the cash becomes available, you can gain access as and when you please, as frequently as you may need.
The payments will be revolving. This means that you’ll be expected to pay back what you withdraw within a certain amount of time from the withdrawal – this will be calculated on application.
As you pay back the balance, you’ll be able to withdraw up to the full amount, much like a credit card. If you have any questions about lines of credit, give us a call today or fill out the contact form. We are always here for you and your business!