Line of Credit
A flexible finance option that gives your business access to funds when needed, without committing to a fixed loan amount.
What is a Line of Credit?
A Business Line of Credit provides ongoing access to funds up to an agreed limit. You can draw down money as required and only pay interest on the amount you use, rather than the full facility.
Benefits:
- Flexible access: Borrow what you need, when you need it.
- Pay interest only on funds used: Cost-effective compared to fixed loans.
- Support cash flow: Ideal for managing seasonal fluctuations or unexpected costs.
- Revolving facility: Once repaid, funds become available again.
Why It Matters
A Line of Credit gives businesses financial agility. It provides a safety net for short-term expenses and supports day-to-day cash flow without the need to reapply for new loans each time funds are needed.
Key Considerations
- Costs: Interest applies only to borrowed funds, but arrangement or facility fees may apply.
- Eligibility: Lenders typically assess business turnover, trading history, and creditworthiness.
- Repayment: Flexibility can be beneficial, but careful management is required to avoid long-term reliance.