One of the best ways of overcoming cash flow issues in your business is to secure business lines of credit. Whenever you have a shortfall or a gap with incoming revenue, that business line of credit can be used to purchase inventory, pay monthly bills, handle payroll, or even to take advantage of growth opportunities that might arise. Choosing the right business line of credit can be very important since they are not all created equal.
If your business lacks perfect credit history, you may want to avoid applying for a line of credit at a traditional bank. Many online lenders offer less stringent qualifications for their lines of credit, and you may have better luck applying with them.
Be careful when applying for your business line of credit, because you’ll want to make sure that the loan limit offered by a lender is in line with the amount of cash you really need. For instance, if you anticipate needing money for business growth, you may need to have a larger loan limit than if you just anticipated paying some monthly bills with your cash source.
For the most part, business lines of credit will come with variable interest rates, which means that there could be a significant difference in the rates over a period of time. Make sure you’re aware of what the starting interest rate is, as well as how much variability there might be at that rate. You’ll also want to know exactly which index your variable rate is associated with, so you’ll know what to expect with any changes.
Make sure to investigate the rules associated with minimum payments on your business line of credit. You’ll need to be sure that you can actually afford to make those minimum payments every month, or it will seriously impact your credit history, and inhibit your eligibility for future loans.
Interested in Obtaining a Line of Credit?
We may be able to help you obtain lines of credit if your business would benefit from that. Contact us at Prosper Lending Firm, so we can discuss some options involving business lines of credit.