There are many types of loans on the market that can benefit your small business. However, getting a line of credit with your bank is a far more flexible option than most. It lets you borrow cash when you must have it, gives it to you at any time of the day from anywhere in the world, and has little retention. Here are a few steps to follow to obtain this form of lending.
Get Your Paperwork Together
Before you can ask for assistance from the bank, you must get your paperwork in order to present it to them. Check your credit rating to ensure that it is high enough to be accepted. The lender will look into this as well to ensure that you are eligible for a line of credit. Compile your financial reports that indicate what your cash flow is if you have any debt related to your business, and what you hope your growth will be in the coming years. You should also state if you have any money in retention as well. Talk with a representative to make sure that you have everything that they want. Once you do, send it to them.
Review the Amount Awarded
You might be applying for a line of credit to pay for a specific expense. You will want to have a dollar amount in mind when you apply for this account. Compare what you have received from the bank to what you determine you must have to cover the invoices that are due. If you are short, talk with a representative to see if they can increase what they have awarded. You might have to look for an alternative solution to cover the rest or set aside some of your profit and hold it in retention.
How To Access Your Money
When the financing is approved, set up an online account with your bank and link the line of credit to it. From here, you will be able to move the cash from one spot to the other. You will be required to pay interest on only what you have borrowed, instead of the balance remaining. You can also transfer funds, even if there’s already an amount taken from it. Be sure that you know what the rate is for this type of loan. While it may be higher than a traditional bank loan, do you have more flexibility with it, and can use it on items for your business such as staffing, equipment, and travel.