5 Reasons a Business Revolving Line of Credit May Benefit You
Advice for Women Entrepreneurs
1. - Flexible Payment Terms. - Traditional term loans require set monthly payments that can potentially present a challenge
to the growth of a start-up business. On the other hand, a revolving credit line offers flexible repayment terms. Unlike a term loan, if a business has a slow month it can pay the minimum amount due.
2. - Personal and Business Separation. - One of the challenges many business owners face is keeping personal and business expenses completely separate. The benefit of a revolving business credit line is that it enables you to streamline and track your business expenses since your credit line is dedicated solely for business.
3. - Access to Cash on Demand. - Unlike a traditional loan, a revolving credit line enables you to source funding before your business actually needs it. Because of the cyclical nature of business, you may find yourself wanting to borrow money to take care of your company’s short terms needs. By being able to access funds on the credit line at any time you can keep your business running smoothly, day in and day out.
4. - Builds Business Credit. - Businesses need to establish ratings with the major business credit reporting agencies. Using a business revolving line of credit allows you to build a positive payment history that appears on your company’s business credit report. This will allow you to potentially obtain future credit for your business based on your company’s creditworthiness.
5. - Flexibility of Usage. - A closed-end loan is for a particular use whereas a revolving business credit line allows you to decide what to spend your cash on for your company. Since the credit line is revolving a business can use the cash for multiple purchases compared to a loan that can only be used for one purpose.
Source: SBA-Gov
Patty Block, President and Founder of The Block Group, established her company to advocate for women-owned businesses, helping them position their companies for strategic growth. Charting the course for impactful, sustainable, profitable businesses, the beacon is control: of your strategic direction, your money, your time, your staffing, and your ability to bring in business. The Block Group brings together the people, resources and ideas that build results.
Advice for Women Entrepreneurs.
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