Quality business line of credit
Asset based business line of credit is a credit option available in Canada but it is slowly becoming popular in other parts of the world as well. These lines of credit are also known as operating loans. It is a loan option in which the bank commits to lend the borrower a maximum amount of money dependent upon the receivables and inventories. The loan amount is prefixed. The services are short term in nature. No long term options are available to the borrowers. These services do not include services for procuring real estate property because that involves a long term commitment.
The main advantages of this business line of credit are as follows:
• These options are favorable for those people who do not have any other option for those who do not have cash flow for external supports.
• It is an ideal option for the people who do have adequate inventories or a future contract at their disposal.
• It is a good option for those business owners who have a large amount of receivables pending.
• Assets can include inventories, contracts, machineries, receivables and any other potential contract or purchase orders.
This line of credit is also known as the revolver because the operations revolve around the day to day activities. In Canada this option is strongly encouraged by the banks and financial institutions. There are other similar plans available to the borrowers across the world.
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