Lines of Credit
A line of credit is a flexible, pre-approved amount of money that you can borrow as needed. It’s like having a revolving credit account. You pay interest only on the amount you borrow. A business line of credit is secured by a business asset to lower the lender’s risk (and the interest rate).
Overdrafts
An overdraft allows spending beyond your account balance. The bank honors transactions, but you pay interest on the overdrawn amount. It is useful for short-term cash flow needs or unexpected expenses.
nvoice Financing
Invoice financing (factoring or discounting) unlocks money tied up in unpaid invoices. It’s suitable for managing cash flow. It allows a business to immediately access money that is owing to them from their customers.
If you have this business model and you have cash flow issues, you may be able to sell your invoices to specialist lenders or factoring companies to help you overcome any cash flow issues. Lender manages debtor book and credit control.
Unsecured Business Loans
These loans provide a lump sum without collateral. Repay over time with interest. However, it’s important to understand that these types of loans have higher interest rates than secured loans.
Business Credit Cards
They are another cash flow financing option, though they normally have high-interest rates.
