Using a Line of Credit (LOC) as Working Capital for Business
At times, just about every business requires more cash than what is readily available to it in hand or in its bank accounts. Several business owners turn to their personal or business credit card in these situations, financing larger purchases or cash advances with a set intention of paying off the debts incurred over many months. However, a credit card is best used for day-to-day spending which you intend to repay quickly.
Carrying a large balance on your credit card from one month to the next can surely stack up debt over a period of time – particularly because most cards have high rates of interest on cash advances. In these situations, having a line of credit (LOC) in place can provide your business with a financial edge.
If you are looking for a form of loan that will allow you to access funds to expand your business or bridge the gap in cash flow, then look no further than a line of credit. It too can help boost revenue by letting you finance new business revenue streams. A credit line is also a very convenient source of funds for small businesses in particular. Applying for it before you require funds would provide you with the flexibility you need to make the right calls for your business, just when they need to be made.