Business Lines of Credit
Unlike small business loans in which the borrower takes out a specific amount and receives a lump sum with predetermined interest rates, regardless of how much of the sum the borrower ends up using, a business line of credit offers enhanced flexibility and the ability to adapt to needs as they arise. A business line of credit is often used as a method of funding inventory, purchasing new equipment, paying payroll, or covering a lull in business operations in the short term. Business lines of credit exist to help business owners address any need that comes up, whereas more structured loans have a specific purpose for their use.
Think of a business line of credit similarly as you might a credit card. The financial specialist determines a preset amount that your business has access to and you may draw on that amount to pay whatever costs are needed. You begin accruing interest on the amount taken out until it is paid back. The overall dollar amount that you can withdraw doesn’t change unless you ask and qualify for an increase. Regardless, you have the understanding that the total amount of the line of credit is available to you should you need it.
Typically, business lines of credit are offered as unsecured lines, meaning you do not need to put up collateral to secure the line of credit. Business lines of credit can have variable interest rates with sums up to $100,000, or more if you agree to a lien.
Regardless of your need, Riverday Capital is here to make sure you secure the funds needed to keep your business thriving. Contact our New York or Florida offices or apply online today.
