If you own a company you will no doubt need additional funding at some point even well-run companies will run into cash flow issues from time to time. As such you should plan for these issues ahead of time to avoid getting costly loans when you absolutely need money fast.
One way to have an available amount of credit on hand is to get a line of credit for your business. Lines of credit are essentially like business credit cards and are used in very much the same way. In today’s discussion we will be talking about the business line of credit process, how it works and what to expect as you grow through the process.
The application for a credit line is very much like that of a loan. The business line of credit process begins with an assessment of your company based on standard criteria. These criteria in include the amount of revenue which your company earns each year as well as your profits and loss statements and your credit score. It is important to note that your credit score for your company is separate from your personal credit score and must be billed separately.
Once you have submitted your application typically it will take between 48 hours to two weeks to have a loan officer assess your company for the purpose of evaluating how much if any will be allocated to you in the form of a credit line. Once a determination has been made whether or not you will be approved you should receive either a letter or a phone call depending on the process for the lending institution which you have borrowed money from. If for some reason they do not approve you, you are entitled to get a free copy of your credit report to assist you in evaluating potential reasons why they may have denied your claim. Assuming that you do get your credit line you will then need to understand the terms and conditions thereof.
This brings us to the final part of the business line of credit process, which is how do you use your credit line? You can use your credit line very much like a personal credit card. There is no strong stipulation on how you must use it but understand that you must repay the line of credit before it becomes available again. Much like a credit card partial payment of the balance will increase the amount available.