Published by Leonardo Calcagno
Businesses occasionally may need to borrow money to have enough cash on hand for expansions, debt repayment, and more. When funds are needed, there are a number of options available for businesses. One of the best may be to get a revolving line of credit. This offers numerous benefits for businesses today and lets them get the cash they need when they need it.
More Flexibility
Businesses applying for Revolving Lines of Credit will find they have access to more flexibility when it comes to loans and repayments. If approved, they’ll have immediate access to cash, which allows them to get funds whenever they’re needed. In most cases, they can get the funds in as little as one business day. They can then repay the loan and borrow more money as needed to help the business thrive and grow.
No Collateral Needed
Many types of loans, especially when there are large amounts of money involved, will require collateral. This is especially true if the business doesn’t have much credit built yet. However, a revolving line of credit doesn’t require collateral, so there’s no risk to the business. They can borrow the money they need and repay it easily, without worrying about losing important equipment or buildings if they are late on a payment.
No Penalties for Paying Early
Though typically used in mortgage loans, many other types of loans also have penalties for prepayments or paying the loan off faster than expected. When money is loaned, interest is charged and adds up over the life of the loan. If the loan is paid back faster than expected, the borrower pays less in interest, which means the lender doesn’t make as much money. This isn’t a worry with revolving lines of credit, so businesses can pay back the loan fast and get a new loan when they’re ready.
Only Pay for What’s Used
Businesses that use a revolving line of credit only have to pay for what is used. If they only borrow part of the line of credit, they only pay interest on the part that was borrowed. This can help the business save quite a bit of money compared to a standard loan where they pay interest on the full amount, even if they only used part of what they borrowed. When the business needs to borrow more funds, they again only pay interest on what is used from the line of credit, which means continued savings over time.
Build Credit Further
Credit is needed to be able to borrow money, but it can be hard to start building it. Businesses that don’t have a lot of credit will find they can build their credit by borrowing money and repaying it on time. This works with a revolving line of credit, too. The business will build its credit as it borrows and repays money from the line of credit, opening it up to a higher limit in the future or the ability to take on different types of loans, like a mortgage for an expanded warehouse.
If you’re looking for ways to access extra funds for your business, it may be beneficial to look into getting a revolving line of credit. Look into the options today to learn more about the benefits of this and why it might be a good option.