Build Business with a Line of Credit

Has your business ever had an unexpected opportunity or expense? Do you need to purchase extra inventory for the holiday season?

Every business should have a Line of Credit to help with the ebbs and flows of market cycles. SouthWest Federal Credit union offers a very strong and flexible Line of Credit to meet the needs of local businesses.

Lines of Credit are designed to be utilized and paid down as business needs arise and income is generated. Most Lines of Credit have an interest only feature, which makes the payments much smaller than if it were a Principle and Interest loan. The Line of Credit is also designed for certain business purposes, including working capital, such as: inventory purchases, advertising for special occasions, payroll needs, short falls in cash flow while waiting for account receivables to come in and other short term uses. However, utilizing a Line of Credit for equipment purchases or building improvement is not a good use. Equipment purchases and major repairs to a building are better suited for the Principal and Interest type loan. You don’t want to use up all of your revolving funds for projects that can’t easily be paid back, even when the cash situation gets better. Advantages of SouthWest Federal’s Line of Credit include:

     • Interest only payments for 5 years
     • Low fees
     • Simplified processing using the SBA Express Program
     • Currently lower than average interest rates
     • Loan is typically unsecured
     • Can be for a start-up or seasoned business

Some of the criteria needed to underwrite the loan are a simple business plan with projections, proof of on-going income, tax returns for both personal and business, your articles of incorporation or however you are registered with the State, a good credit score and the ability to make the payment.

During these tough economic times it is best to put your business in as many successful paths as possible, having available cash to meet business needs is a good way to safe guard your success. For more information on a Business Line of Credit, contact a Member Service Representative at 435-652-2310.