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Lines of Credit and Invoice Factoring are two options available to you if you need funding for your business, but which one is better suited for your business needs?
A Line of credit will give you a set amount that can be used over a period of time while invoice factoring will provide funds as soon as an invoice has been paid. Lines of credit can be beneficial if you need more flexibility with lower monthly payments, while Invoice Factoring may be best if you need immediate access to working capital. Deciding which option would work best for your company needs depends on how much money is owed, what type of industry you're in, and whether or not you want a loan in place for a set period of time.
Lines of credit lenders require a good credit score and a strong track record in business operations to qualify. Lines of Credit facilities are available for periods of time, typically reviewed and renewable each year. They will often have set repayment dates with interest only payments during the term.
Invoice factoring provides funds as soon as an invoice has been paid
Invoice Factoring can be beneficial if you need money as soon as an invoice has been paid and if you have an urgent need for cash. Invoice factoring can provide a company with short-term working capital that they may not otherwise be able to get.
A line of credit will help you by providing the funds that are needed in order to maintain normal business operations, but invoice factoring would be more helpful when an urgent need for cash is present.
In conclusion, a line of credit can be helpful if there's no urgent need for money but invoice factoring would be more useful when quick access to capital is needed. If this sounds confusing, contact us today so we can help! (858) 345-6338
