Every company needs easy access to cash for emergencies and unforeseen expenses. Business lines of credit offer a beneficial source of funding when your company needs it the most, but only if you understand how these credit lines work. We look at the basics of commercial credit lines and why your business needs one to help you protect your company’s financial stability.
Why Choose a Line of Credit?
Many business owners dismiss the idea of a line of credit as unnecessary when they can simply get a loan if needed. While business loans are a viable option, they are not as flexible as a line of credit. With a loan, you receive the full sum and then have to apply again should you need additional funding later. When your business has an approved line of credit, you can request funds as needed without any further application process.
What Kinds of Business Lines of Credit Are There?
When you look into commercial credit lines, you will find a few different options. Secured credit lines require some form of collateral, such as your property. If you default on your credit line, the lender can take your company’s property. Unsecured credit lines have no collateral necessary. Your company’s credit history may determine which of these you can access.
You also have the option for short-term and long-term credit lines. If you need funding access for the next six months or a year to get through an unpredictable season, short-term credit lines are ideal. When you want something your company can use for the long haul, look for a long-term solution instead.
How Do You Get a Line of Credit?
Applying for a line of credit is easier than you think. Your company’s credit history plays a factor in your eligibility, so make sure the business has sound credit. Check with a variety of lenders to assess eligibility requirements, interest rates, and accessibility considerations. Then, gather the paperwork necessary for the lender you choose and submit your application. You may need to provide financial statements, including income statements and revenue figures to support your application.
An unexpected disaster or disruption to your business can prove costly not only financially but also to your business reputation. When your company faces an uncertain time or an unplanned expense, access to business lines of credit might make a significant difference. The right credit line can keep your company afloat in tough times. Contact Latta Commercial Capital today to get a line of credit for your business without any collateral requirements.