If you don’t have a line of credit for your business yet, it’s smart to ask yourself why. Are you hesitant to apply for credit or is the process making you feel overwhelmed? You don’t have to feel bad if that’s the case; many business owners get nervous talking about financing.

There’s a big difference between perceived obstacles and reality when it comes to business loans. Small business owners sometimes automatically assume that they won’t qualify, but that’s not generally the case.

The Advantages of a Line of Credit

Before getting into the requirements for application, it’s good to know why credit lines are useful. This type of financing is extremely flexible, so you can use it for virtually any business need, large or small. This includes urgent needs such as equipment repairs and tax payments, everyday things such as payroll and rent, or important purchases such as inventory or computer systems.

Another benefit of lines of credit is the way they give you better cash flow. It’s helpful as a business owner to have money available exactly when you need it. That way, you can protect your relationship with suppliers and take great care of your customers. Instead of having to wait to order inventory until your capital increases, you can use a line of credit to make the purchase and then use the profits to pay off the funding quickly.

Perceived Challenges of Lines of Credit

If a line of credit is so useful, why are some businesses so worried about it? One misconception is that making mistakes with the credit line will damage your credit score. The reality is usually exactly the opposite. Having access to capital when your business needs it can help you avoid falling behind on payments to suppliers, which has a bigger effect on your credit score.

Another thing people worry about is the interest rate of business credit. This is a legitimate concern because interest rates for credit lines are higher than traditional loans. That said, lines of credit have better terms and rates than credit cards, and many companies use credit cards all the time. Don’t let fear hold you back from getting great solutions for your business.

The Application Process

The application process is simpler than you may think. There are even options for startups. It pays to learn more about lines of credit and see if they’re the answer to your organizational needs.

BMF Advisors offers unsecured lines of credit to both new and established businesses. To get an extra source of working capital, contact our offices today.