Small Business Options for Lines of Credit

Take your financial flexibility to the next level with a small-business line of credit. While cash flow is a major hurdle for many small businesses, reliable lines of credit with great terms can give you the working capital you need to grow your business and outpace the competition. Find out what options are available to you today and see if you qualify for a line of credit.

A typical line of credit is usually reserved for large businesses. This credit option requires a long-standing financial history, excellent credit score and high annual revenue. However, it also offers great features, like low interest rates and very high maximum credit allowance. However, as a small-business owner you may need to build up your credit score and finances before accessing this option.

For a quick solution, consider looking for short-term lines of credit. Many lenders offer a short-term line of credit for small loans with an accelerated repayment plan. Because of the low credit ceilings, these credit lines are easier to become approved for than a traditional one. It’s a popular option for small businesses, who may not need as much funding. Of course, the short repayment time frame makes it a slightly riskier option, so you’ll need to be cautious when taking out credit.

Some line of credit financing uses backing to help secure the credit. Two popular forms of asset-backed financing are invoice-backed and equipment-backed line of credit financing. Backing your financing with an invoice or multiple invoices gives your lender assurance that they’ll receive payment. First, you submit a particular invoice or all your invoices for a set period of time. Depending on the value of your invoices, you’ll receive a portion of them as a credit limit. Take out as much financing as you need to respond to sudden expenses or to purchase inventory before invoices are cleared.

Similarly, equipment-backed financing uses your costly machinery as collateral. You’re given a line of credit to tap into whenever you need, and agree to give up your equipment should you become unable to pay back the credit in the allotted time. While this requires you to take on more risk, it allows you, as a small-business owner, to access a line of credit that you might otherwise be unqualified for.

Take on new clients and grow your business with these line of credit options. Whether your small business is looking for ways to aggressively expand or you simply need a safety net in case of emergencies, check out each of these lines of credit to find the best solution for your business.