A business line of credit is very similar to using a credit card, and it provides your company with the same kind of freedom that a credit card does. There are two kinds of lines of credit, one being a secured line of credit, and the other being an unsecured line of credit.
An unsecured line of credit is more difficult to obtain and requires a strong credit history, while a secured line of credit is easier to obtain, because it has the backing of collateral that you provide.
Using a small business line of credit
By far the most common reason for small businesses to obtain lines of credit is to have access to short-term funding. For the most part, this short-term funding is then used to handle operational expenses which include meeting payroll, purchasing inventory, or paying for supplies, utilities, and building rentals. Some seasonal businesses rely on lines of credit to get them through business lulls, until a steadier source of incoming revenue picks up again.
The beauty of having lines of credit, is that the funds don’t have to be spent on any specific purpose, and you don’t have to specify how the money will be spent when you’re acquiring the line of credit. It’s simply a terrific way of maintaining positive cash flow without having to take out loans. One of the great advantages of using lines of credit is that as you use funds and pay them back each month, you can renew the available balance on your line of credit, so that it can continue to be used for future expenses.
Lines of credit from Bear River Financial
Almost all businesses would benefit by having lines of credit available to them, and we at Bear River Financial try to accommodate businesses in that regard. Contact us today to see if you qualify for a business line of credit that will provide financial freedom for your company.