What is a Line of Credit?
A line of credit is similar to a credit card. It’s a flexible loan that offers you a specified amount of money that you can access, in whole or in part, as needed. This “revolving” credit account lets you borrow (add to your balance) as often as you need. After borrowing you are required to make monthly payments to repay your outstanding balance, just like a credit card.
A line of credit is intended to help businesses meet short-term cash needs, like purchasing supplies or inventory. For Right Way Medical customers, this is often useful to cover increased equipment or disposable needs before you’ve received the corresponding revenue.
Benefits of a line of credit
- Get what you need, when you need it
- No interest until credit is used
- Interest is typically much lower than credit card
- Credit available when you need it without repeated loan applications
- One-year interest only payments *
- Converts to 60-month term note after 12 months *
* Right Way Medical specific
Disadvantages of a line of credit
- While cheaper than credit cards, they are more expensive than traditional secured loans
- In most cases, the interest on a line of credit is not tax deductible
What’s the bottom line?
For one-time equipment purchases, you are best served by talking to Right Way Medial about capital and operating leases. However, to cover multiple purchases over time, our line of credit is perfect. It may seem easier to use a business credit card to cover cash flow, but if you can’t pay your balance in full each month you’ll end up paying much more in the long run. Our line of credit offers interest only payments for 12 months, after which you line is converted to a term note of up to 60 months. Call us today to discuss how we can set up your line of credit.