Edward Shin is the CEO of Noah Bank. Noah Bank is a FDIC, minority-owned bank with branches in the Mid-Atlantic region of the United States. Noah Bank provides a variety of loan opportunities to businesses, and one of the loan products the bank offers is a business line of credit. If you’re unsure whether or not a business line of credit is right for your funding needs, Edward Shin explains a few basic things about a business line of credit below:
What Is a Business Line of Credit and How Can It Help a Business?
A business line of credit is an agreed-upon arrangement between a bank and a customer where a maximum loan balance is established. The customer can then borrow from the line of credit anytime he or she wants as long as he or she doesn’t try to borrow above the maximum balance. The bank charges interest on any money borrowed based on an agreed upon rate.
There are many advantages a business can experience going this route. First and foremost, if a business owner needs funding right away to, for example, pay a vendor, he or she can withdraw money from the business line of credit right away. There is no need to submit an application every time you withdraw from the business line of credit. For businesses that need short-term funding for day-to-day operations, a business line of credit can be an efficient solution.
In addition to that, business owners usually pay interest on the amount of money borrowed – not the amount of the business line of credit. Business owners can use the funding when they need it and leave it alone when they don’t. It can be used for a wide variety of scenarios to help business owners manage the ups and downs of running a business. If you’re thinking about applying for a loan, you may want to contact a loan specialist at Noah Bank to learn more about the various products that may be of value to you.