How Small Businesses Can Benefit From a Line of Credit

By: First Union | Date:


How Small Businesses Can Benefit From a Line of Credit

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The need for funds to keep your business running smoothly is a common one for many company owners. And yet for smaller businesses, especially newer ones, finding this funding isn't always the easiest thing to do. Banks are hesitant to lend to such entities. A recent study showed that less than 30% of small business owners were able to procure the financing required. There are options, and one such option is a revolving line of credit.

What Exactly Is Revolving Credit?

First off, you should understand the difference between a traditional line and a revolving line of credit. With a traditional line, the funds don't replenish. In other words, once you pay off what you've used that amount is deducted from the remaining funds available. With a revolving line, however, the funds do get replenished. So once you pay back the amount borrowed, that amount is now available for use again.

In this sense, a revolving line of credit works very much as a credit card would. The good thing about this is that the money is always there assuming you pay off what was borrowed. So you do not have to keep applying. Once in place, it is there for your continued use. Some other benefits to a revolving line of credit include:

  • Flexible terms
  • You can build your business credit history
  • Use it when you need it
  • Sometimes you can get cash on demand

There are primarily three different types of lines: short term, medium-term and bank lines. A short term revolving line generally has a repayment span of 18 months or less. As compared to some longer-term choices, the amounts funded tended to be lower with these. When going with a medium-term line, you usually have one or more years as far as repayment, and the dollar amounts are higher than with the short term. Getting approved though can be more difficult. And finally, with a bank line, again the amount funded can be quite high; keep in mind, these are the most difficult for which to qualify if you're a small business.

If you need additional capital, First Union Lending can certainly help. We offer a variety of business loan programs and lines of credit, and we pride ourselves on helping small businesses thrive. Call today!

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First Union Lending LLC is a dually licensed Lender/Broker with its main offices located at 4900 Millenia Blvd First Floor Orlando, FL 32839. First Union Lending LLC and its ads are meant for continental United States, including Alaska and Hawaii small business owners. Business Loans offered by First Union Lending LLC have varying rates and terms that can range from 30 - 120 payments and all rates and terms are based on eligibility of the business and its owners. The actual terms are based on credit, business history, industry, amount and terms. As an example, a $5,000 loan paid over 5 years at 8% would have a total repayment of $6,082.92 over the life of the loan. We use the latest encryption to protect sensitive information transmitted online, as well as run our own secure server network to ensure your information is protected offline as well.

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