Business Line of Credit
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<strong>Business</strong> Loan Tips<br />
/businessloantip<br />
31.10.2018<br />
/businessloantips<br />
/businessloantips<br />
31.10.2018<br />
<strong>Business</strong> <strong>Line</strong>s <strong>of</strong> <strong>Credit</strong><br />
Whether you’re in business or brand-new to any industry, you know that cash flow is one <strong>of</strong> the most important<br />
things that you need to deal with on a day-to-day basis. Of course, entrepreneurs generally want to focus on what<br />
they enjoy doing, be that writing, web design, video production or any one <strong>of</strong> a number <strong>of</strong> things that they base<br />
their business around. However, there comes a time when you’ll need to look into alternative methods <strong>of</strong> finding<br />
capital, either for new equipment so that you can do your job faster, or to perhaps hire new employees or rent<br />
your first <strong>of</strong>fice space. In cases like this, it’s best to consider first how much you can pay out <strong>of</strong> business pr<strong>of</strong>its<br />
and then to consider the various loan instruments that are available to you. Of course, what is available to your<br />
business will depend largely on the type <strong>of</strong> business you have, your cash flow, and <strong>of</strong> course your<br />
business’ credit. However, one common option is our business lines <strong>of</strong> credit.<br />
<strong>Business</strong> lines <strong>of</strong> credit are in some ways better than the traditional loans or even than business cash<br />
advances or credit cards. The reason for this is that lines <strong>of</strong> credit can be used for anything related to the<br />
business and <strong>of</strong>ten have lower interest rates and more flexible repayment terms. This is the same<br />
reason personal lines <strong>of</strong> credit are generally favored over getting high-interest credit cards. Of course, if it’s a<br />
smaller version you’re thinking <strong>of</strong>, you may want to get a loan or a low interest credit card rather than going to the<br />
idea <strong>of</strong> getting a business line <strong>of</strong> credit. Or, you might be wondering is whether or not you should look into<br />
getting business lines <strong>of</strong> credit in the first place.<br />
Although the temptation, especially if you’re just opening your business, would be to get this financial tool in order<br />
to get the most advanced tools, s<strong>of</strong>tware and training, you will first want to think <strong>of</strong> your cash flow. If you’re brandnew<br />
to your business, then you likely will not have built up a steady client base and, as such, will lack pr<strong>of</strong>its. In a<br />
case like this, the best idea is to use what you have already terms <strong>of</strong> equipment and knowledge. When you are<br />
more firmly established, you can get the more advanced business tools. Although this may seem like doing things<br />
backwards, in fact, it can do two things.<br />
It trains you to be creative in terms <strong>of</strong> both getting your work done and in handling your finances. While you may<br />
not have the most up-to-date equipment, you avoid putting yourself in debt before you have enough clients to pay<br />
for what you really need. While you may think that this will put your disadvantage, especially if your competitors<br />
already have most <strong>of</strong> the advanced equipment, consider how it promotes your creativity. You can focus on<br />
excellent customer service and products, regardless <strong>of</strong> your equipment.<br />
When you’re looking at business lines <strong>of</strong> credit, business credit cards, business loans or any other type financial<br />
tool that will potentially put your business into debt, first see if you can get just the amount that you feel that you<br />
require. Remember that banks and lenders are always looking for ways to give you more than you may actually<br />
need, even if it is lent at a good interest rate. Remember that these lenders and credit unions are also in business<br />
– and their business is loading out financial tools and interest rates which pr<strong>of</strong>it their shareholders. While there’s<br />
nothing wrong with this, if you can negotiate with them to get just what you need, you will find it easier to pay back<br />
the loan. You will also help protect yourself from being tempted to spend the excess on anything frivolous.<br />
Remember that any lines <strong>of</strong> credit you get for your business are simply another form <strong>of</strong> bank loans for<br />
businesses. They will still have an interest rate and you’ll still be negotiating a monthly payment as well as other<br />
terms. However, business lines <strong>of</strong> credit are typically in larger amounts than bank loans and, in some cases, can<br />
only be applied for if you meet minimum standards.
<strong>Business</strong> Loan Tips<br />
/businessloantip<br />
31.10.2018<br />
/businessloantips<br />
/businessloantips<br />
31.10.2018<br />
In addition to business credit cards and business cash advances, there are also SBA loans to consider as an<br />
option as well. Of course, there are several things to think about before you look into getting business lines <strong>of</strong><br />
credit. For one thing, you not only need to determine how much you think you need as well as a payment plan for<br />
prompt repayment. You also need to look at your overall business plan and really decide, based on numbers and<br />
not on emotion, whether or not the time is right for you to take advantage <strong>of</strong> one <strong>of</strong> these tools. This is something<br />
that can only be done properly by looking not only at your current business finances as well as expenses, but also<br />
at the short- and medium-term plans you have for your business. If you find that you are at the point where you<br />
need to use business lines <strong>of</strong> credit to further your business ambitions, and you have the capital (both current and<br />
future) to be able to pay it back, then this is something that you will definitely want to go out and get.<br />
But what if you don’t have those finances? In that case, you may be in a situation where you absolutely do need<br />
new training, s<strong>of</strong>tware or equipment. You may not quite have the funds to buy it outright, but you’re also not sure<br />
if your business can handle a large business line <strong>of</strong> credit, online or otherwise. What you need to do is take a<br />
good, hard look at how you’re going to pay the line <strong>of</strong> credit down once you get it and immediately start making a<br />
solid plan that you put into effect even before you apply for the loan. This is something that business owners can<br />
sometimes forget about, simply because they want to be able to compete in an <strong>of</strong>ten changing marketplace and,<br />
as such, are driven to potentially buy things that they may not yet be able to afford. This isn’t always a bad idea,<br />
just make sure that you have a plan to get the necessary funds together over time so that you don’t fall behind<br />
and risk not only your businesses credit, but your reputation and your business’ name. The last thing you want,<br />
especially if you’re a start-up, is to have a bad name among your local lenders.<br />
Of course, this is assuming that you go with one <strong>of</strong> your local lenders to get the line <strong>of</strong> credit that your business<br />
needs. However, there’s another option that you would probably want to consider as well: that <strong>of</strong> business lines <strong>of</strong><br />
credit online. One thing to remember is that while most business owners will tell you that they prefer to deal with<br />
lenders face-to-face, more and more businesses and people are finding out that getting loans and lines <strong>of</strong> credit<br />
online is faster and, in some cases, easier for both parties than it is to go the regular, physical application route.<br />
Consider for a moment, however, that when you’re researching lenders that are local to your business, it can be a<br />
much faster process than trying to research all the different lenders that will find online. One <strong>of</strong> the best things to<br />
do in this case is to start by having a plan for not only how much you need but what terms you’re willing to agree<br />
to. By doing this first, you’ve actually done a lot more research than you would think. This can weed out very<br />
quickly any lenders that do not meet your specific criteria and, best <strong>of</strong> all, you don’t actually have to talk to<br />
anybody to do this. Because you are getting a line <strong>of</strong> credit for your business online, you may find that you’ll be<br />
able to actually get terms, interest rates and versatility that would be impossible at a physical <strong>of</strong>fice. Applying for<br />
a business line <strong>of</strong> credit online can also be quite a bit faster than it would be to fill out forms the normal way. With<br />
the advent <strong>of</strong> technology that allows you to store your information and then fill in a form with one click, you’ll be<br />
able to very quickly apply for any loan you need. And because there’s so much competition, you can actually have<br />
an easier time finding exactly what you want from lenders online. True, you will have to spend little bit more time<br />
researching to make sure that the company is one you want to deal with, but you have much more choice than<br />
you would be if you limited yourself to lenders in your area.