Boost your working capital with a line of credit

Does revenue for your business come in like clockwork? Or do you experience an ebb and flow of cash at different times of the year?

If your cash flow fluctuates seasonally or changes with certain market conditions, you might need an infusion of capital for unexpected short-term expenses, equipment repairs, general cash flow needs, and more. A cash boost also can help you seize an opportunity to grow, hire staff or secure a new deal.

When used wisely, a revolving line of credit can improve cash flow and help your business navigate dips in the road. Here are some of the benefits of using a line of credit as an outlet for having working capital to boost your cash flow on hand:

• It’s convenient. A line of credit is a convenient way to cover those times when you need incremental funds. Use it for payroll and other expenses that can’t benefit from the liquidity of a credit card. And once repaid, the funds become available to borrow again.
• It’s cost effective. You only pay interest on the amount you borrow. Rates on a credit line are typically lower than a credit card, which saves you a significant sum in the long run.
• It’s flexible. The funds can be used for a variety of short-term needs. Seasonal companies may use a credit line to cover expenses during slow months, and repay it when business picks up. You also can leverage a credit line to buy raw materials and pay it off as soon as the products are sold.
• It’s proactive. Even if you don’t need funds now, there’s peace of mind in knowing the line of credit is available whenever conditions require a cash infusion.

Most credit lines must be secured by collateral, which is why rates on secured lines are lower compared to unsecured credit cards. These secured lines are generally backed with an asset such as inventory or accounts receivable.

At California Bank & Trust, you can get same-day decision and next-day financing for borrowing needs under $50,000. For financing over $50,000, there are customized lines of credit to address your specific needs. Contact our business bankers with questions.

Is a line of credit right for you?

A line of credit may be a good solution for your business if you need working capital to help:

• Provide seasonal cash flow.
• Build up inventory for a special promotion or selling season.
• Take advantage of unique purchasing opportunities.
• Repair equipment or pay other unexpected expenses.
• Attract customers with more generous payment terms.
• Grow your business.

Contact a business banker at California Bank & Trust or visit a branch near you to learn more about your options.[cite::171::cite] [cite::172::cite]