Lines of Credit: The Ideal Friends with Benefits

lines of credit

So, here you are again. You and your finances just aren’t getting along like you used to. She’s been down lately, the spark isn’t there anymore, and worst of all, her cash flow has been unpredictable and fluctuates often. “It’s natural,” they say.

No doubt, you still love her, but maybe it’s time you started tackling your finances’ mood swings head-on, rather than just ignoring them. No, we’re not telling you to break up with her completely—for goodness sake, think of the business!—but, it may be time for you and your finances to start seeing other funding options.

That’s where lines of credit come in.

This trusty funding option is the perfect way for you to spice up your liquidity, while maintaining an open relationship with your current finances. Business lines of credit aren’t like other funding options. They allow you access to an extra sum of cash to use however you need without the baggage that comes with a traditional bank loan.

In fact, they just might be the best financial friends-with-benefits you could ever find. You don’t always have to use it, but it’s there when you need it. It’s the buffer to any hardship you and your finances may have. Best of all, you can use it for minor day-to-day activities, rather than devoting it to one big project. Think of it like this: you two can play 18 holes of mini golf instead of going on a cruise together.

By using lines of credit, you will never have to worry about paying back money you don’t have. Instead, you only have to make payments on money you’ve actually withdrawn. So, say the limit for your line of credit is $4,000. You use $1,000 to pay for repairs, maintenance, supplies, etc. At the end of your allotted payback time, you only have to pay back the $1,000 plus interest rates, leaving the remaining $3,000 in your possession to use another time.

Better yet, unlike a traditional bank loan, your business is free to pay the minimum amount due if it has a slow month. This means more time for you and your finances to work things out without having to take a break.

Don’t worry—business lines of credit won’t get in the way of you and your finances when she starts to perk up again. If you are having an especially good month, you are able to keep your line of credit on hand, untouched, until you need it again. Your funding friend-with-benefits is not interested in complicating the relationship between you and your finances. If your balance is zero at the end of your pay period, then your payment is zero. It’s as simple as that.

Lines of credit are a great way for start-ups to get their business off the ground. They can also help boost your credit rating. Strong credit ratings make for strong finances, and greater chances to obtain loans in the future.

You know your finances better than anyone, but that doesn’t mean she won’t throw you for a loop from time to time. An alternate funding pool is essential to use as fallback for any unplanned expenses you may have to take care of. Lines of credit give you the opportunity to grow your business without exhausting your resources, allowing you and your finances to do all the things you’ve always planned.

Don’t want to commit to a bank? No problem. Factoring provides you with an alternate funding pool without tying you to a bank. Better yet, we’ll play matchmaker for you by considering your financial needs and pairing you with a factoring company.