Having your restaurant pre-approved for a line of credit means a lender is confident in your ability to handle a cycle of borrowing and repayment.
This offers a great deal of flexibility in cash flow and spending that can benefit your restaurant in many ways.
Much like a credit card, a line of credit entitles you to a certain amount of money to use when and how you need it. The total amount of money is always there no matter when you first qualified or were approved.
When you need cash immediately to make a purchase or offset an expense you weren’t expecting, the line of credit has you covered.
A bank loan can be useful if you need money for a large purchase, but once that money is gone, you’re still saddled with monthly loan payments.
With a line of credit, you only pay back what you borrow. Once the payments are complete, you don’t have to worry about making more until the next time you draw on the line of credit.
Sometimes suppliers have limited-time discounts that will vanish if you don’t take advantage of them. Since these sales are unpredictable, you may not have the cash on hand to benefit from them when they appear.
A business line of credit ensures that you won’t miss out on good deals, and the initial outlay of money will pay you back with significant savings over time.
No matter how well you plan, your restaurant will always throw you a few curve balls along the way. Equipment breaks, rent increases, employees leave or the usual crowd of tourists fails to show up.
You should have a separate emergency fund to cover these unpleasant surprises, but just in case it’s not enough, your line of credit is there to help you out.
Lines of credit are best for when you have small expenses that can’t be covered by the cash you have on hand. These may include:
Being smart about how you use your line of credit ensures that your business credit score remains favorable.
Use it only when you need it, and make payments in a timely manner. This will keep you in good standing with your lending institution and preserve a balanced budget for your restaurant.
Apply today for a business line of credit with line amounts from $5,000 up to $725,000 with no collateral required!