Line of Credit
A flexible line of credit can improve your company’s success and improve its financial security
What is a line of credit?
A line of credit is a form of loan from which you can make withdrawals when you need to. All companies experience times when their cash flow is struggling and a line of credit can be the difference between becoming insolvent and coming through unscathed.
With a line of credit your company is given a credit limit that can be used when necessary, almost like a credit card with a set upper credit limit. As you overtime repay the money you have withdrawn from the line of credit, it is added back to your line of credit for future use. A line of credit is one of the most popular forms of financing among our customers due it’s flexibility and ease of use.
How can my company benefit from a line of credit?
Any business needs cash to operate but sometimes your cash flow simply can’t support the business for the time being. Perhaps you’re waiting for a big account to pay an invoice or need to make a large investment in your business to remain competitive. Such instances that severely impact the cash flow of a business and threaten the stability of a company. But with a line of credit in place, you can be confident that your company will be able to deal with any such situation.
When using a line of credit correctly, they are an advantageous way to finance your company. With its high flexibility, it allows you to whether periods of uncertainty or slow growth. Common examples when a line of credit comes in handy are:
- When hiring a new employee to meet additional demand.
- Purchasing new equipment or machines.
- Opening a new office or expanding into new markets.
- Purchasing additional inventory to prepare for a busy period.
Simply put, a line of credit is a great tool to use when experiencing volatile times. With a line of credit you can feel confident that you will be able to weather tougher times ahead as you will have cash available when you need it.
Traditional way of applying for a line of credit
Traditionally, you would apply for a line of credit through a bank or other financial instituations. They would require, at the least, one face-to-face meeting, a thorough walkthrough of your budget and business plan before performing a subjective evaluation of your company, its management group and its credit worthiness. There are also several different types of fees associated with the line of credit regardless of whether or not you are actually using any of the money such as a line fee, just for having the line of credit available, a start-up fee for creating the line of credit, and an annual maintenance fee for having the line of credit open. These fees are on top of the interest paid when withdrawing from the line of credit. Therefore, it is vital to thoroughly read the agreement to ensure that you understand the total cost of the line of credit.
Line of credit from Mynt
At Mynt we offer a very simple line of credit. You register your company through our onboarding process which is designed for smaller companies and you will immediately be presented with the line of credit we can offer you. There are no fees associated with our line of credit, unlike banks or financial institutions. If you decide to make a withdrawal from the amount we have made available to you, you are only charged for the amount you actually use, allowing you to keep your costs down. You are also allowed to repay the amount you have withdrawn early with no fees associated with doing so. Simply put, pay only for what you use.
Our belief is that all companies should be able to get fair financing in relation to the company’s performance. If your business is doing well you should get financing with attractive terms. Therefore, we prefer to work with updated financials by connecting your bank or accounting system with our system so we can get the best possible picture of your company’s financial standing. The more information we have, the better offer we can make. Mynt combines advanced technology with common sense to create a better financing alternative.
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