If you haven't considered using business lines of credit as an alternative financing option for your business, you're in for a surprise. The requirements for a business line of credit can be much simpler. But before you apply for a business line of credit, you should know the benefits of this type of financing option.
A-Line of Credit for a business is in our opinion, one of the first things a business should obtain when starting a business. Lines of credit are simple. It’s similar to a credit card, and you typically access the credit line at your convenience. The interest rate is usually much lower than a credit card. A credit line is an amount of credit that you can access as you need it in any way you need it to grow your business.
They are flexible, unsecured loans with no strict stipulations about the use of funds. They can be used for a variety of purposes, from investments to purchase orders. This type of credit can help businesses cover unexpected expenses and can even be used to hire additional employees.
One of the advantages of business lines of credit is the flexibility of using it for your company's working capital needs. Instead of taking out a large, fixed sum at the opening of your account, you can draw on the funds as needed. In addition, because the funds are revolving, they can be used again after you pay them off. That flexibility is key to the success of your business. Don't stay limited.
Another advantage of a business line of credit is its ability to meet short-term business capital needs. Those businesses that operate seasonally can use it to meet inventory needs. This allows them to pay off the line of credit and use it again, even after the inventory has been sold. You can use the money in this way for the next several years, if necessary. If you plan to use it responsibly, you may even increase your business's credit rating as a result.
For example, let’s say you obtain a $50,000 line of credit. If you need say $12,000 you access it and you still have $38,000 you can access at a later time. When you pay it down to say $8,000 then you have $42,000 more you can access. To maximize your credit lines it may take the help of a Business Loan Consultant. Credit lines can really come in handy to fill in the gaps for a business. Need to make payroll a little short? Need to pay a vendor for an unexpected repair? What about those slow times of year Whatever the gap might be, the credit line can be a great backup.
How is C-Credit Works different from the App-only Process?
When submitting credit applications to funders that approve credit based on application-only, you are being asked to find customers that fit into their credit window. This process is usually easy to follow and can be fairly predictable. This is how the leasing industry has functioned for several years.
Customers that do not fit the credit scoring model require a little more intuitiveness to understand where their potential for success may be. At AlignChance Financial, we know many lessees will endure credit hiccups at some point in their business. We also believe many of these people deserve credit if given a chance to tell their stories. ACF Consultant does not credit score; instead, we look for trends vs. isolated cases. On most occasions, it is possible to plan for approval by helping your lessee set the proper expectations.
Feel free to get creative and explore different options with your lessees. Keep in mind that C-Credit lessees need a funder that will think outside of the box. This is commonly the only way to help them re-establish their poor credit history. With a little creativity, We can assist you with creative funding that will jump-start your business.
AlignChance Financial will help you improve your closing rate with C-Credit.
There is no question when the rate is high and lease terms are short that some customers cannot afford the payment. Successfully closing a C-Credit customer is NOT about rate. It is about helping them recognize the value of having their equipment OR the fear of not getting their equipment. We recognize the value of obtaining the equipment and generating a positive ROI.
With just a one-page application we will have your piece of equipment delivered to your place of business.