A business line of credit provides on-demand funding for your company. There are many types of lines of credit ranging from unsecured, meaning that it is not backed by any kind of assets; to secured, backed on a general basis by all assets of the company, or by specific assets that are structured into the funding formula of the line of credit. Often, these assets are dynamic and change with the expansion and contraction of the company, allowing your line of credit to expand and contract as well. Crestmark offers four different types of business line of credit. This selection allows us to help companies of a variety of sizes at any point in the growth and development cycle. Whether you’re just starting out, looking to obtain working capital for your existing business, or want to grow from your established base, Crestmark stands ready to help you meet your working capital needs with a business line of credit.
Asset-Based Line of Credit
Asset-based lines of credit can be secured with accounts receivable and/or with inventory. Under this lending plan, you submit a batch of invoices or inventory to Crestmark and are funded based on the predetermined formula for the invoices or inventory that make up the batch. It is flexible and well-suited to companies whose balance sheets are stable and where growth is projected.
Accounts Receivable Financing
Also referred to as a ledgered line of credit, this type of funding is secured by your accounts receivable/invoices. You submit your invoices to Crestmark as you issue them to your customers and funding is based on each separate invoice. Because we aren’t funding in batches, we’re able to create a solution that can work with almost any business, even one that’s very new. Since line of credit advances are based on the invoices submitted, this creates a very flexible funding tool for dynamic companies who are looking to fund sales growth. One of the real advantages of this type of financing is that it utilizes the value of your existing receivables to support additional funding for your company.
Recourse and Non-Recourse Invoice Factoring
Factoring offers flexible financing that functions very similarly to a line of credit but is not technically considered one. Under an invoice factoring agreement Crestmark structures your funding facility based on accounts receivable/invoices. The invoices are purchased at a discount to provide immediate availability of funds to your company. This has similarity to accounts receivable financing and is useful in specialized industries, to provide funding for start-up companies, and companies in extreme transition.
When your company needs additional working capital, a business line of credit can provide the funding you need. Crestmark’s business development team can work with you to determine which type of financing solution is the best fit for your current business situation. Contact us today!