Business Lines of Credit Can Infuse Cash into Your Small Business

Business Lines of Credit

Businesses depend on cash flow to pay for overhead expenses, employee payroll, income taxes, equipment repairs and all other recurring and unexpected costs that arise. However, sometimes cash flow can come to a screeching halt as business owners wait for customers or clients to pay invoices. It is during those times that business owners benefit from business lines of credit, which infuse cash into a small business and allow it to run seamlessly.

Think of the penalties the IRS could impose for failing to pay quarterly estimated tax payments on time. Or, consider the effects of operating your business with equipment that is in need of repair, slowing production time and causing customers to look for a more efficient provider. While waiting until you have the cash to pay for those types of expenses may keep you out of debt, it could ultimately hurt your bottom line. By tapping into your line of credit, you could have avoided expensive tax penalties and kept your customers happy.

How Business Lines of Credit Work

A line of credit works similarly to a credit card, in that you may borrow and repay money as you see fit. You can use the money for any business expenses you need to pay for, so long as you pay back at least the minimum payment each month. To set up a business line of credit, you may apply through a local bank or through a lender who partners with the Small Business Administration to provide federally-insured business lines of credit. Once approved, you may withdraw against your line of credit either at the bank or using a credit card connected to the account.

For more information, go to Business Lines of Credit at

Business Lines of Credit Can Infuse Cash into Your Small Business was last modified: January 23rd, 2012 by Amit Kraidman
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