A business working capital line of credit can help business owners to survive normal (often seasonal) fluctuations in business. Business owners need to have flexibility and control when it comes to obtaining working capital loans to adequately meet those needs. It’s no longer a luxury to have a working capital line of credit, it’s a necessity. You may only need $10,000 of capital credit to cover payroll or other expenses, but a working capital line of credit can go up to $500,000 depending upon the strength and revenue of the business.
There are some factors you should consider when obtaining a line of credit for your working capital. Lenders offer multiple options for businesses when it’s time to take out a working capital line of credit, so you have to understand the terms of your line of credit clearly. Below are some of the factors to consider when looking for a working capital.
A Working Capital Line of Credit Provides Short-Term Financing
Working capital lines of credit are considered a great way to provide short term funding for basic day to day operations. That’s what makes having a line of credit a necessity, so you have the flexibility to take care of repairs, meet payroll, purchase inventory and handle other miscellaneous expenses with little stress. Because a working capital credit is shorter term financing, you will finish the payback schedule of your line much sooner, freeing up additional cash-flow for your business. Additionally, at one time or another all businesses may run into cash flow problems and need to use credit. Cash flow issues can stem from a variety of credit reasons, ranging from a large account falling behind in payments, to a seasonal spike in sales making it difficult to keep sufficient inventory on hand to meet the need. A line of credit may then be necessary for you to obtain working capital.
A Working Capital Line of Credit Gives You the Flexibility You Need
Working capital lines of credit are meant to help business owners move business forward without struggling financially. However, you must understand the terms of the credit to be able to manage your working capital line of credit. Banks may approve you for a line of credit larger than the amount you actually need, but in some cases you may have to pay fees and interest on the full amount of line. A working capital line of credit allows you to be approved for one amount of capital credit such as $100,000, but gives you the option to access parts of the full amount of line as needed instead of being forced to take the full amount of line. In most cases, this enables to the borrower to pay less interest on borrowed funds than accessing the full amount of credit at once. Also, it’s important to find out if there are any prepayment penalties associated with the working capital lines of credit.
Consider Alternative Business Funding Lenders
Business owners today are finding alternative funding sources advantageous for a variety of credit reasons. Alternative funding companies, like Mulligan Funding, have more flexibility to work with businesses to give them the working capital line of credit they need. You may be approved for a line of credit of $50,000, but if you only need $20,000 of credit, you will only pay fees on the amount of credit you access.
Having this flexibility allows you to better manage your working capital line of credit. You may only need the working capital for a few weeks or months. If so, you’ll only pay fees for the days that the funds of your capital credit are accessed. No matter what your business situation is, Mulligan Funding works with you to find the right loan situation for your circumstance.
Mulligan Funding has provided working capital loans for hundreds of businesses since 2008. We help you understand your working capital line of credit to ensure you receive the funding you need with no surprises later on. If you’re in need of some extra working capital for your business, be sure to contact us to see the options of lines of credit we have available to help your business today!
Call Mulligan Funding at 855-326-3564 to discuss related credit questions or financing options today!
*The information shared is intended to be used for informational purposes only and you should independently research and verify.