A line of credit involves a bank setting aside designated funds for a business to draw against as needed, similar to the credit limit on a credit card. As funds are used, the credit line is reduced, and conversely, when payments are made, the line is replenished. There isn’t a set monthly payment as you would have with a traditional loan. Using a bank line of credit is ideal for covering purchases that are too small for a traditional loan, but too large for a credit card.
Lines of credit are helpful for managing seasonal, predictable, or industry-related cash flow variations. When an expense comes up, you can immediately access the line of credit instead of waiting for funding from other sources. Keep in mind, they require a personal guarantee and involve an annual fee to cover administrative costs.
To learn more information about using bank lines of credit to fund your business, contact a Nevada Corporate Headquarters representative today at 1-800-508-1872.