For businesses that find their cash flow isn’t a steady stream month-after-month, a Revolving Line of Credit (RLOC) is a valuable tool. This loan helps smooth cash flow fluctuations due to inventory needs, timing of accounts receivable or seasonality of a business.
Similar to a credit card, you pay interest only on the amount drawn, and you pay down the RLOC when the cash flow improves.
Here are 7 ways businesses commonly use their RLOC:
1. Peace of Mind
Boost your emergency safety net with an RLOC. If your business experiences an emergency, such as a burst water pipe ruining inventory or a broken piece of equipment, quick access to funds can help you stay afloat and recover faster.
2. Off-season Operations
For businesses without steady cash flow, such as seasonal tourism, RLOCs are key to covering day-to-day expenses during the slower off-season. Simply draw what you need, and pay it off during peak season.
3. On-time Payments
For businesses that collect payments 10-45 days after services are performed, access to funds through an RLOC is a valuable way to bridge the gap in cash flow and ensure that there is no delay in paying vendors, utilities, and other bills.
4. Maintain Payroll
RLOC funds can help ensure your employees are always paid on time during periods of low cash flow, or even to support hiring new staff ahead of your peak season or business expansion.
Quick access to funds allows you to take advantage of business opportunities, such as early payment discounts from vendors, or sales on equipment or inventory.
6. Competitive Edge
Access to funds allows you to make moves that give your business a competitive edge — like taking your business online, refreshing your marketing, or investing in training and education programs for your staff.
There really is no limit to what you can use your RLOC for — it’s there to support the needs of your business with quick access to cash when you need it, as you need it.
Contact SESLOC Business Services at (805) 573-1816 or visit our website to learn more about getting a RLOC for your business. Or, inquire online today »