Loans Resources

A line of credit is an arrangement between a financial institution, usually a bank, and a customer that establishes a maximum loan balance that the bank will permit the borrower to maintain. The borrower can draw down on the line of credit at any time, as long as he or she does not exceed the maximum set in the agreement (Investopedia).

Small business owners have utilized this method of business financing for years due to its convenience and simplicity. But what if the business line of credit that you depended on for years was suddenly taken away from you? Would you have a backup plan or would you be doomed to watch your business crumble right before your eyes? This may be just a hypothetical question to you, but for many small business owners, this has been their realities.

According to BusinessWeek, beginning in MarchJPMorgan Chase (JPM) suspended credit lines for a large number of business owners. The article, Snipping Lines of Credit for Small Business Owners states that thousands of small business owners, who had been clients of Washington Mutual before Chase bought the bank, were affected by the phenomenon.

Apparently, the bank gave these small business owners the option to pay off the balance in full, agree to a conversion of the line of credit into a term loan, or go into default, if [they] could not convince Chase of their creditworthiness, (BusinessWeek). Paying off the balance in full and going into default could leave a small business owner with no money to spend for his/her business or even in debt. Converting the line of credit into a term loan may suffice for a short period of time, but what happens when the money is gone? For small business owners who have lost their lines of credit, a business cash advance may be the answer.

A small business owner can receive a business cash advance if he has owned his business for at least six months, the business processes at least $3,500 in monthly credit card sales and there is one year or more remaining on the business lease. The business owner must not have any unresolved bankruptcies. Small business owners who meet these requirements have the opportunity to receive up to $500,000 in business funds through a business cash advance. Best of all, the business cash advance is renewable. Every three to four months, borrowers become eligible for renewal.

Small business owners can apply for a business cash advance by visiting a business cash advance provider’s website and completing an online application. After applying online, business owners will be required to complete a two-minute application and submit the last six months of merchant statements, a copy of the business lease and a voided business check.

Small business owners use lines of credit to make payroll, to purchase inventory and for many other daily operating expenses. Losing this funding source can be detrimental. A business cash advance can help small business owners get back on track.