We think a business line of credit is worth discussing before you need it. A business can be operating well today and still face an unexpected expense or a delayed customer payment tomorrow.
Waiting until the account is low can limit the time available to review options.
Access and use are different decisions
A line of credit may give an eligible business access to funds it can draw as needed, within the agreement's limits. Some owners arrange access and leave it unused until a specific need arises.
That can be useful. It also requires understanding the terms. Ask about draw fees, maintenance costs, payment requirements, interest, availability and any renewal or review conditions.
Having an approved limit does not mean the entire amount should be used. We want each draw to have a purpose and a repayment plan.
Match the draw to the need
A temporary collection gap may call for a different amount and duration than a larger growth project. The payment schedule should fit the cash flow that will repay the draw.
Early repayment may reduce costs under some arrangements. The written terms determine the actual result, so we want that understood before the money is used.
At Tree of Life Funding, we prefer to talk about preparedness while the owner has time to make a considered decision. A line of credit can be one tool in that plan for a business that qualifies.
Watch the video
Business Funding Explained: How Different Industries Use Capital
Let’s talk about your business
If you want to review your options before the next unexpected expense, start at treeoflifefunding.com/apply.
