How a credit line can make your company's financial life easier
Applying for and getting business credit is not always an easy task, even though it is essential for business growth.
Looking for a line of credit for your organization can be the difference between closing the month positively or on the red line, and it also helps you keep up with the payment of bills.
In more structured businesses with solid planning, credit lines can serve as fuel to expand operations.
However, companies often encounter difficulties in this process. Obtaining credit for companies is not something simple, especially through traditional means. For all companies, but especially SMEs, this process can be a source of major headaches.
When you open an Everest account, you can apply for a credit line when needed, and pay the expenses at the end of the month and extend the repayment period if necessary. Find out more here.
To help you with this, we will tell you more about the importance of credit and what it can be used for by your company.
What are Credit Lines?
Lines of Credit are the resources offered by financial institutions to individuals and companies for a specific purpose. Basically, they are offered through financing at lower interest rates. At Everest, we offer a grace period of 35 days, so you can repay your balance in full at the end of the month without any fees or extend the repayment period for up to 45 days.
In the times we are living, lines of credit are vital for small and micro companies, which often live on the monthly sums that come into the cash flow and on the Working Capital to maintain themselves in times of economic recession.
But how can a small business benefit from a line of credit? Here are some ways:
Through emergency cash flow:
If your cash flow isn’t closing and you won’t be able to pay employees and you don’t know where to get that money from, surely a line of credit can help maintain emergency cash flow so that basic bills can be paid.
To increase working capital:
In some cases, there is still cash coming in for day-to-day operations, however, the future is a bit uncertain due to the new scenarios. At this time, some business owners may opt for the line of credit so that there is extra money for the months to come.
To invest in advertising:
Other business owners may see in this pandemic a way out that was not planned, such as online sales or delivery. In these cases, beating the competition that is already established on the Internet can be difficult without the help of advertisements and digital marketing. So the credit line can be geared to this purpose, to get the business seen in the digital media.
The search for business credit lines is a constant for many entrepreneurs in the world. It is a real struggle. Therefore, it is important to think carefully before making a decision.
Opting for a business account that provides credit lines is beneficial for your business growth. However, banks and financial institutions have a set of rules and criteria to make the allocation of credit lines or loans viable, which we call Credit Policy.
The Credit Policy considers the reality and the moment of the business. This means that the document is not fixed or immutable. Changes that are pertinent and relevant to the credit assessment can be made whenever they are needed.
To define what percentage of the company’s budget will be used and what is the profile of the client that can count on this benefit, it is necessary to consider several factors, such as the analysis of the client’s objectives and history; their banking and commercial references
their current economic situation; the guarantees of the operation and the amount that can be used without compromising the financial health of your business.
The benefits are many, both for companies seeking a solution that makes credit lines available, and for financial institutions that add value to their business by offering this service.
If you are looking for more flexibility and purchasing power, visit our website and learn how to improve your financial health!
Share on Facebook
Share on LinkedIn
Twitter
Share by email
