Lines of credit work much like a normal credit card, but usually they come with checks as well (with NO penalty or increased APR for using them). If you had a line of credit you could deposit money into your bank account to pay anything you need. Cover your marketing expenses to increase your sales, pay your employees even if you had a slow month, buy needed equipment to offer new products, or open a new office and reach new clients.
While we can get many people introductory percentage rates of zero percent for six to twelve months, most of the credit lines after that are prime plus 2 to 5 percent, presently totaling between 8% and 11% per year
You make monthly payments on whatever you have withdrawn, and can use one line to pay another when revenues are too low.
How Business Lines of Credit are Better than Loans?
When you take out a loan for $300,000, you immediately pay interest on the entire amount. With a line of credit you only pay for what you use. This can make a big difference in how much you have to repay.
A loan is for a fixed amount of time, and after you pay it off it is gone. A line of credit is available for you to use again and again, for as long as your business stays in business. So three years from now when you want to open a new store, you can simply use your existing line of credit, and you don't have to go begging to the bank or go through any more approval processes.
When you get a loan with a personal guarantee, the bank will never release your liability. One mistake can haunt you for years. Business lines of credit that are unsecured are the sole responsibility of your business. If something happens and your bank fails, they can't come after you and your personal assets.
How Business Lines of Credit are Better than Venture Capital or Angel Investors?
Businesses can actually get lines of credit, unlike venture capital. By some statistics, a full 99% of people who attempt to get money from Venture Capitalists are turned down. Does that mean that none of those were good business ideas? Of course not! What it means is that VC's only invest in certain types of businesses. They have to be Super-high growth, usually with patent protection, expensive lawyers, and with members of the company who have already worked for VC's at another firm who had big successes. So unless you are one of the founders of Google, VC's are probably not the answer for you.
When you get money from a VC, even if they only buy a small percentage of your company, they will gain complete control of it. They can fire you at any time, for any reason they want, and keep your company. Before you get the deal they will make you agree to a vesting schedule for your shares of the company, and if they fire you in the first year you could end up with nothing! Bank's have no such control over you or your company. Run the business the way you see fit, and enjoy the profits when you succeed. Don't spend nights worrying about how they are going to kick you out of your own company.
How Business Lines of Credit are better than Bootstrapping (Self-Funding)?
Most people can't afford to build an entire business on their savings. Businesses are very expensive to start, with all the new taxes, the state and federal fees, not to mention office space, employees, and insurance! Unless you are sitting on $300,000 in cash, you NEED money from somewhere else. Then the only decision is where to get it from.
Funding a business with your savings is too risky. What happens if a great business concept gets hit with unforeseen market conditions? What if you built the perfect new restaurant and finished it 1 week before Hurricane Katrina hit? Business lines of credit leave that risk with the banks, who understand how to balance their budgets so that something like that won't wipe them out. You don't have the resources of a big bank, who has the government to help them in a pinch, so let them help you instead. It is much safer.
Why it makes sense to use a service like ours to get your Credit Lines?
The simple truth is that without us you most likely will not be able to get business lines of credit. The banks have very particular and difficult application processes, which take time and expertise to do correctly.
Apply for too many lines of credit, and no matter how well your company is doing they won't give you any more. We have a way of removing inquiries as they accrue so you can keep getting new credit lines without waiting.
Go to the wrong bank and they will never release your personal guarantee. We set it up correctly so you can get them removed as quickly as possible.
When you get denied for credit, you have no way of knowing why the bank rejected you. We have contacts inside the banks that let us know specifically why you were rejected, giving us the ability to correct errors and apply again the right way.
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