December 4th, 2019

Published by: Andrew Jagopat

As your business expands, so do the options available for financing. Clients with higher credit profiles will start to see pre-approvals for credit lines, that don’t carry the same strict repayment schedules as traditional loans. Whereas loans are great to bridge capital for larger purchases, Business Lines of Credit can serve as a cushion, to support your daily operations.

Since these lines are credit-based, they make great options for businesses of smaller annual revenues, but stronger credit profiles. If there is demonstrated credit worthiness (FICO 760+), businesses are allowed access to the same multi-million dollar credit facilities bigger corporations use to sustain their cash-flows. Small businesses, with established credit history can utilize lines as low as $6,000, such as those currently offered by our partners at OnDeck. When looking to establish a credit line, some things to consider as a business owner, are:

· Which owner (if multiple) has the strongest credit profile?

· Does the Business have any history with Lending?

· Is there any unsatisfactory repayment history?

Establishing a credit line, early on, includes other perks such as: broader repayment options and lower maintenance fees. FullTimeFunding is able to offer Business Lines of Credit with both Weekly and Monthly repayment options and a withdrawal-based fee structure. It is possible for business owners to qualify for both a Business Line of Credit and a Traditional Business Loan. While both offer benefits to the business, they each carry unique perks that can add value to how the business operates.

For example, a business owner approved for both a $50K Traditional Loan and a Line of Credit for up to $50K would have to consider the use of the funds, in order to judge what option would be best for the business. Not sure how much money you’ll need for an upcoming expense? A Line of Credit offers the increased flexibility of having the full dollar amount available at all times. Since traditional loans are revenue-based, if a smaller dollar amount is initially withdrawn (ie. $35K), the owner would then be limited in acquiring future funding options.

Lines of credit offer the protection of having the full dollar amount available, while only paying on what you use. Leveraging this type of financing, in conjunction with traditional loans, are great ways businesses can maximize the growth potential of their operations. By combining the two products, business owners can access funds at their own discretion.