One of the biggest problems faced by small businesses is maintaining a steady cash flow, since expenses such as payroll, vendor supplies, and building overhead simply do not wait until incoming revenue is available. It’s no exaggeration to say that cash flow can literally be the lifeblood of any small business, and when you don’t have it, your business will definitely suffer, and it may even fail as a result. One of the very best solutions for keeping cash flow consistent is to have an unsecured business line of credit, and the advantages it provides can be crucial to survival.
Fast access to cash, with high credit limit
With an unsecured business line of credit, you’ll have access to however much cash you need, at any time. Usually available through the use of a credit card, you can literally go just about anywhere and still have the access you need, and since these lines typically involve high credit limits, you can use the cash to cover any urgent expense.
As opposed to a traditional business loan which requires fixed monthly payments, you have a good deal more flexibility when making payments on however much of the credit line you’ve used. In difficult times, you can pay a minimal amount, and then when your finances are more robust, you can pay more to lower your outstanding balance. Many business credit cards offer very low interest rates, at least for the first year of usage, to encourage card holders to use their credit lines. However, you can also think of it as something similar to an insurance policy – an asset you have that you rarely need to actually use.
Segregation of personal and business finances
Although you do benefit from business credit reporting, you can still keep your business finances and your personal finances completely separate. This can be very useful for establishing credit history for the business, apart from your own personal credit history. It also protects your personal credit history from anything that might be happening in the business, so that you don’t necessarily become subject to the same downturns that your business might be undergoing.
To learn more about how an unsecured business line of credit can help your business, contact us today!