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Looking for the Best Business Line of Credit? Here’s What You Should Know

Friday, August 18, 2017 0:18
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Running a business in the current economic environment is not for the fainthearted. There is so much competition, especially now that you are operating in a globalized environment. You have to compete with more established brands in your niche which are able to target your traditional customer base through the internet. In order to survive, you have to think creatively to grow your business and stay ahead of the competition. If you are looking for financing, you have to look beyond the traditional sources of credit.

Why Think Of New Lines Of Credit for Your Business?

A report by the U.S. Small Business Administration (SBA) says that lack of financing is among the top reasons why many new businesses collapse. This is worrying considering that the National Small Business Association (NSBA) says that 29% of small business owners have reported a reduction in the lines of credit available to them over the last 4 years. 1 in 10 of these entrepreneurs had their lines of credit called early by banks, making things worse for them.

If you are running a business today, you need a better financial cushion to drive your operations. Whether you are expanding operations or launching a marketing campaign, you need good cash flow. What’s more, winning new customers and retaining new ones also requires more cash injection into your advertising efforts. With the limited traditional lines of credit available to you, it is time you started looking at other available options.

Benefits of Non-Traditional Business Lines of Credit

A business line of credit is a flexible source of capital that works almost like an ordinary credit card. This means you have access to cash in your bank but you only get to pay interest on the amount you withdraw.

With this innovative financing, you can borrow money up to a certain limit but you only get to pay interest on what you have borrowed. It operates like a revolving fund guaranteeing you have a stable source of cash.

Among the advantages you get by opting for a line of credit for business as opposed to business loans include:

  1. Quick and fast access to cash – Once you apply and meet all requirements, you can start accessing your cash within 24 hours. This is an advantage that you can’t get from your bank.
  2. Higher credit limits – Business lines of credit offer higher limits, making it easier for you to boost your business without worrying about where the cash will come from.
  3. Separation of personal and business finances – You are able to boost your business credit reporting because this line of credit is not mixed with your personal finances. In the same breath, it means you also protect your personal credit ratings.
  4. Versatility – You get cash that can be used for a wide range of things including equipment financing and inventory purchase among other business expenses.

When choosing a line of credit for your business, make sure you consider your business financial needs, the loan term and APR. Always go for a reputable lender and look for reliable customer service.

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