Short-term cash flow needs? Consider a business line of credit

Virtually every company has short-term cash flow or a need for quick cash from time to time. That’s why a business line of credit can be lifesaver. It’s a lending tool that can be used to fund large, one-time purchases or day-to-day expenses, such as inventory purchases, operating expenses and occasional needs for extra cash on hand.

With a line of credit from First Utah Bank, you are pre-authorized to borrow up to a specified amount subject to eligible collateral. Typically a line of credit is secured by business assets and may be accessed whenever your business needs cash. Your loan only accrues interest on the amount that you have advanced and there is no penalty for paying down the principal balance to reduce your interest expense.

How a Salt Lake City business owner can secure a line of credit

Start with a visit to First Utah Bank. We’ll provide a free consultation so that you review all of your financing options. The beauty of a business line of credit is its accessibility. When a loan, you receive a set amount in one lump sum. With a line of credit, you can tap your financing when you need it.

Why you would need a line of credit

There are several reasons why a business would benefit from a line of credit. You may want to improve cash flow, fund payroll or have seasonal working capital. You may want to purchase inventory or materials or finance accounts receivable.

A business line of credit can also be used to manage an unexpected expense or take advantage of a business opportunity that you wouldn’t otherwise be able to.

Typical line of credit collateral include accounts receivable, inventory and equipment (subject to certain limitations). In some instances, lines of credit may be unsecured if certain credit conditions are met.

Seasonal changes in your industry and business may be managed much better with a line of credit. Let’s say you have a business that caters to the always thriving Utah ski culture. As soon as the powder starts to form, that’s when you may need an extra boost to rev up your company for another busy season. Or, let’s say you started a retail outlet near Brigham Young University. When students are in session during the fall and spring, your sales tends to increase; during the summers your business is less busy. A business line of credit also can be used to bridge the gap between providing clients or customers with a product or service and being paid.

There’s no doubt a business line of credit can be incredibly useful. In other cases, a small business loan may be a better choice for your business. Our commercial lending officers can help guide you to the right product for your business and situation.

Remember: Where you obtain financing for your small business matters. First Utah Bank is a preferred lender with the U.S. Small Business Administration. And as a community bank, we’re dedicated and accessible. We love working through challenging financing situations to find a creative solution. When it comes to small business financing, a creative solution can make all of the difference, especially when it’s combined with a bank that has the employees who take the time to understand your business. and cares about your business. When we say that our lending decisions are made locally, we mean it.

We also have a wide variety of tools for small businesses beyond financing. Our accounts, such as Free Business Checking, as well as our merchant services and treasury management solutions, are all designed to help your business grow its sales, increase its profitability and succeed over the long term.

There’s a myriad of ways that a business line of credit or loan and all of First Utah Bank’s other innovative business tools can help a Utah entrepreneur continue on the pathway to success. To find out more about how a line of credit can help you, speak to one of our Commercial Loan Officers. You can reach them online, or call First Utah Bank at 801-308-2265.