Line of Credit

If so, a business line of credit with our Michigan agency could be the right option for you. Depending on your business needs, our advisors will be able to recommend the financing option best suited to your circumstances.

If you need access to financing to cover recurring business expenses or cash flow gaps, a business line of credit may be what you need. This kind of loan gives you ongoing access to cash that you can withdraw whenever you need it. Unlike a term loan, you only withdraw and use what you need. For each billing cycle, you can pay your balance in full or make a partial payment. Whatever remains unpaid will be carried over to the next cycle.

​The interests will accrue on the remaining amount. That means that you’ll only pay interest on what you use.

The line of credit is also easy for most people to understand, since it’s so similar to a regular credit card. If you know how to use a credit card, you’ll have no problem using your line of credit, but just in case, you can read about how to use a business line of credit here.

Like a credit card, a line of credit replenishes itself as you make your payments. That means that you don’t have to apply for a new loan every time you need more cash. You can imagine what a relief that would bring you as an entrepreneur to know that you have access to cash when you need it. At the same time, if you don’t need it, you don’t have to use it!
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How a line of credit can benefit you:

• It can act like a safety net for your business: if you ever find yourself facing an unexpected event, you know that you have access to cash on-hand.
• You won’t ever have to miss out on any opportunities because you don’t have the cash available. Your line of credit allows you to take advantage of opportunities as they arise.

Reasons why other small business owners use credit lines:

• Reopening a business
• Bridging cash flow gaps
• Covering payroll
• Hiring more employees

How are interests and fees calculated?

• Origination fees – this is calculated as a percentage of your credit limit. For example, if your credit limit is $250,000 and the origination fee is 2%, then that means that you will owe $5,000 at the time of opening your account.
• Monthly/annual access or maintenance fees – this is a fee that is either a flat fee or a percentage of your credit limit.
• Draw fees – this is a percentage of the funds that you use. For example, if you withdraw $100,000 with a 2% draw fee, you will owe $2,000.
• Additional fees – it is important to be familiar and to understand the terms and conditions of your loan as there may be additional associate fees with your line of credit.

Apply for your line of credit today with Business Loans Michigan and receive a response within 24h! You could have access to your funds in as little as 1-2 days. If you want additional information about the line of credit and if you would like to know if this is the right option for you, please reach out to our dedicated team of financial advisors. Our loan agency can assist you with all your financing needs in Detroit and nearby cities.