Sometimes, business experiences a gap in cash flow – perhaps due to expansion of accounts receivable or inventory.
In these situations, which tend to be short-term, a commercial line of credit can be a good option.
- Flexible borrowing and pay down can minimize interest expenses
- When used to take advantage of supplier discounts, can be money-saving
- Typically tied to the level of accounts receivable
- Floating rate typically tied to Prime Rate
- Annual payouts are typically required