Lines of Credit

Credit and cash flow are critical to the success of any business.

Lines of credit provide greater flexibility to take advantage of opportunities that will help your business thrive. When you need ready access to cash and flexible terms for repaying borrowed funds, an unsecured line of credit is often an ideal solution.

Business Lines of Credit are useful for:
  • Supplementing cash flow.
  • Business expansion.
  • Covering unexpected expenses.
  • Short-term capital or seasonal business needs.
  • Competitive rates.
  • Local decision making and quick response.
  • Revolving credit with interest-only payments.
What is a business line of credit?

A business line of credit has more in common with a business credit card than with a business term loan.

Like a term loan, an unsecured line of credit provides a business with access to money that can be used to address any business expense that arises. Unlike a term loan, however, there is no lump-sum payment made when the account is opened that subsequently requires a monthly payment.

A business line of credit requires a credit review, is renewed annually and is revolving. Like a credit card, interest begins to accrue once funds are drawn and there is a set borrow limit. The amount paid (sans interest) becomes available as you pay down the balance.

Maintaining a line of credit in good standing can help build your business credit rating and position you for better loan terms in the future. Most small business experts agree that first-time applicants should start a modest line of credit and pay off the debt as quickly as possible to help establish a healthy credit profile.

How would I use a line of credit?

The number-one reason business owners open a line of credit is to gain access to short-term funds. Most businesses use these funds to support financing for operational expenses like supplies and payroll or to increase inventory. Businesses that experience regular fluctuations in cash-flow often depend on an unsecured line of credit as a source of working capital. Line of credit funds are usually drawn from a business checking account or business credit card.

Understanding secured and unsecured lines of credit.

A small business line of credit is unsecured debt and therefore requires no collateral. Many unsecured lines of credit offer a variable interest rate and are available for sums in the range of $10,000 to $100,000.

A business line of credit over $100,000 may require a blanket lien on your assets or a certificate of deposit to secure the loan.

Offers of credit are subject to approval. Certain conditions apply.

We offer flexible terms with competitive interest rates. Please contact us at 804.897.3900 for a free, personalized consultation.