Our Revolving Line of Credit is a type of financing designed specifically for the Business to Business (or B2B) space. The credit account provided through the Revolving Line ranges from $250,000 to $10,000,000. The revolving loan allows the borrower to secure a loan or revolving line to grow their business or better manage their cash to seek additional opportunities.
A revolving line of credit is a source of funds that can be drawn from as needed, up to a certain amount, and usually for a specified amount of time. Revolving credit examples include a credit card and Home Equity Line of Credit (HELOC), where you are given a maximum amount to draw from and you make payments based on what you spend.
The revolving line is perhaps the most flexible type of financing for any qualified business. The revolving credit account allows you to borrow up to your credit limit as you need the funds. Your pre-determined credit limit enables your business to determine the use of available funds versus an a traditional installment loan that requires the borrower to specify the use of funds.
Rather than use a business credit card for additional capital or increasing personal credit card debt, the revolving line hels the borrower increase their available working capital. The revolving line can often bridge the gap between upcoming expenses and slow pay receivables. The effect of revolving credit is to smooth out the monthly cash fluctuations.
A revolving credit loan is usually faster and certainly more flexible than the bank or traditional loan. Think about the nature of your business. There are fluctuations due to seasonal changes, cash shortages, quick opportunities and economic crises that come once every 100 years like floods and pandemics. Everyone in business today will never forget the effects of Covid-19 and what the Corona virus did to their livelihood.
Imagine having the revolving line knowing what you know about the capricious nature of business. Think about having that revolving credit line. As long as you can make that minimum monthly payment and avoid too much debt, this becomes an excellent tool to manage your business.
For many businesses, acquiring a loan from a traditional financial lending institution can be challenging, at best. Unfortunately, most business owners are unable to apply to the bank for financing. The biggest challenge is that a lender like the banks or a credit union, unfortunately, require a large amount of paperwork.
This paperwork typically includes financial documents like Profit and Loss statements and Balance Sheets. It also requires the prior 3 years of personal tax returns, business tax returns, and personal guarantees. Lastly, all banks want you to provide collateral and have excellent credit, with a high personal credit score, usually above 720.
Sunwise Capital’s Revolving Line of Credit -Revolving Line of Credit Requirements
For many businesses, acquiring a small business loan from a traditional financial lending institution can challenging, at best. Unfortunately, most business owners are unable to apply to go to the bank for a small business loan. The biggest challenge is that banks, unfortunately, require a large amount of paperwork.
This paperwork typically includes financials like Profit and Loss statements and Balance Sheet. It also requires the prior 3 years of personal tax returns, business tax returns, and personal guarantees. Last all banks want you to provide collateral and have excellent credit with a high personal credit score, usually above 720.
Many entrepreneurs and small- to medium-sized business owners cannot jump over these hurdles. The result is the business owners find it hard to find new or innovative ways to fund their loan requests for working capital, loans, and lines—to expand their businesses or better manage their cash flow.
The unique advantage to this revolving line of credit is that, unlike many other lenders, Sunwise Capital does not notify your customers. For many small companies trying to grow, the biggest negative about factoring is that the business owner’s customers are notified when a factor (or lender) takes over the receivables.
The negative perception is that customers are no longer paying the business, and instead, they believe they are paying the lender or factoring company. This common fallacy may concern the customers and they may start to think your business may have cash flow trouble. In most business loan instances, this is untrue.
So, is a revolving line of credit good? Yes! Since we do not notify your customers, your business gets the funds it needs without giving the customer any need for unnecessary concern. Businesses that take advantage of this offering will have full access to a self-service client portal as well as on-demand liquidity (think online banking).
In most business loan instances, this is untrue. Since we do not notify your customers, your business gets the funds it needs without giving the customer any need for unnecessary concern.
Businesses that take advantage of this offering will have full access to a self-service client portal as well as on-demand liquidity (think online banking). We simply use your business’ accounts receivables as collateral (this makes them secured loans). The result is the time from application to funding ranges from only four to seven days.
With a secured line of credit, you put up an asset as collateral in order to get a lower interest rate. We simply use your business’ accounts receivables as collateral, making them secured loans vs. an unsecured business line. The total time from application, loan document, to funding ranges from only four to seven days. Generally your personal credit score, credit utilization, debt or business credit is not a factor. This is business and not a personal loan.
The revolving line of credit definition describes it as a financial institution extending available credit (money/loan/credit line) to the business for an open or undetermined amount of time. The debt is repaid on a periodic basis. The advantage of this credit is that once it’s repaid, it becomes available again. It is a quasi type of overdraft protection and you pay only on the outstanding balance.
What this means to you is that after the financial institution establishes this “revolver” you can continuously borrow up to that predetermined credit limit. So, each time you purchase something, you are using the extended credit and that amount is subtracted from the credit line. You will pay on the loan and unpaid balance. As you pay off that borrowed amount, your credit line will increase. Think open-ended credit.
Are you familiar with a credit card, HELOC (home equity line of credit), department stores credit card account, or gas cards? Then you are quite familiar with this type of credit. These are all considered revolving credit examples. The key is that once the account is paid off it does not close. The funds remain available for future borrowing. Most owners simply call this a business line of credit.
The nonrevolving credit or nonrevolving lines is typically called installment credit or term loan. This is a loan that makes a regular minimum payment. These can be daily, weekly, or monthly payments. You are provided with a lump sum or principal amount and it is paid off over a predetermined amount of time. Once it’s fully paid, it is retired and the funds are no longer made available to you. Think of auto loan or student loans.