A business line of credit is very much like a credit card in that it provides you with a revolving source of capital, with the main difference being you have access to actual cash, and interest rates are generally lower. It will be very difficult for a startup company to qualify for a line of credit with a conventional bank because they have fairly strict requirements. However, it won’t be nearly as difficult to qualify with an alternative lender that you might find online.

Uses for a Business Line of Credit

Whenever you need cash to cover a shortfall in your business, you’ll have access to that through your line of credit. The great thing about a line of credit is that you don’t pay any interest on it unless you actually draw money from your account. Having that cash cushion in place can make all the difference between smoothing out gaps in cash flow, and running into crises every other month.

Most businesses, including startups, will run into situations where customers won’t pay on time, and that causes an interruption in incoming revenue. You can cover that gap easily with access to your business line of credit, and then you can repay the money to your account once your customers send their payments to you. If your startup business is a seasonal one, that means you will have a built-in gap in sales, and an automatic need to manage a slowdown every year.

Having a business line of credit will tide you over through your slow period until things pick up again afterward. You can also use your business line of credit to purchase inventory, pay employees on time, and in some cases even take advantage of opportunities for business growth. Suffice to say, that having business lines of credit available to your company can literally make the difference between thriving and going under.

Interested in Obtaining a Business Line of Credit? 

With business lines of credit, you’ll have the financial flexibility you’ve always wanted. Contact us at LMC Alternative Business Capital to discuss how a line of credit could help your business.