In the business world, there are a lot of unexpected expenses that can come up and put a rut in your company’s budget. The ebb and flow of purchases and expenditures can be difficult to manage, especially when your value is tied up in assets and equipment rather than cash flow.
However, you can use those assets as collateral to establish a payment plan through a revolver debt loan. This loan works as a line of credit to a company, where a business can take out a flexible amount of cash up to the maximum amount with the ability to withdraw, repay, and withdraw again continuously. A revolving loan offers many benefits to companies that experience sharp fluctuations in their cash flows, helping them balance their net working capital needs.
While figuring out all your different financial options can be difficult, here are five reasons why you should consider a revolver loan with Equify Financial.
1. Available cash funds
One of the most significant benefits that comes with revolver debt is the availability of cash whenever your company needs it. Cash is the bloodline of any business and can be used to pay off any emergency cost or situation that needs immediate attention. Revolving debt is one of a company’s best options for working capital needs like buying inventory, making payroll or handling any last-minute bills.
2. Interest expenses
You can cut down on interest expenses when using a revolver loan. Since you can take out smaller amounts continuously, interest is generally only charged on the amount you take out. This can cut down on the total interest amount paid when compared to a larger, more long-term loan a business may consider taking out.
Another benefit of revolver debt is that it is reusable! Revolver loans allow companies to take out any amount up to the maximum, and as long as they repay that amount, they can take it out again as often as they want. There is no set limit on the number of times you can pull cash out of the fund, unlike with an installment loan where your company would have to reapply for the loan once it has been repaid.
4. Lots of flexibility
A revolver loan offers a lot of flexibility to companies because they can take out any amount of money they wish up to the maximum amount. For example, with a revolver loan of $100,000, a company can take out $0, $500 or $95,000 tomorrow without any consequences, completely dependent upon their needs of the day.
5. More easily manage working capital
Your working capital needs and everyday expenses are unpredictable and can come up frequently. With revolver debt you are able to borrow money immediately to quickly pay off those expenses as needed. These expenses are typically a little smaller in nature and more easily paid off, and companies don’t need the extra time given from term debt.
You want to make sure you are choosing the right type of financing for your company. Give one of our nationwide Equify Financial representatives a call to walk through our different services and see if a revolver loan is right for your business.