Business Line of Credit (BLOC) is a type of credit facility that provides businesses with access to credit based upon their financial performance over time. Typically, BLOCs are provided at competitive rates and offer flexible repayment terms.Is A Business Line Of Credit?
A business line of credit is a type of short-term unsecared loan provided by banks and other financial services firms. Typically, they take between 1 month and 6 months to complete.
They allow businesses to borrow funds without having to pledge collateral, such as inventory or real estate. Most lenders offer a variety of rates based on the term of the loan. Interest payments may be deferred while the borrower continues making regular payments on their debt.
Benefits of Using a BLOC Loan
The primary benefit of using a BLOC loan is that it enables businesses to borrow money while they are still operating. The bank’s capital is not tied up until the business has repaid its loans and the equity cushion is returned.
Therefore, the bank does not have to worry about putting any capital at risk until the business proves that it has sufficient cash flow to repay the loans. In addition, BLOC borrowers enjoy lower interest costs and fewer restrictions than traditional term loans.
pes of BLOC Loans
There are three major types of BLOC loans: revolving, floor plan, and factoring/revolving.
Revolving BLOC – Revolving BLOCs allow businesses to borrow against their future earnings. Borrowers pay back a portion of their income each month and the amount borrowed increases if sales increase or decreases if sales decrease. These loans typically carry higher interest rates than other forms of BLOC financing.
Floor Plan BLOC – Floor plan BLOCs provide collateralized funding to businesses that need working capital immediately. The borrower receives funds immediately upon signing the loan agreement, which means no waiting period and no approval from a lender.
However, the rate of return is generally less than that of a revolving BLOC due to the high cost associated with providing temporary liquidity.
Factoring/Revolving BLOC – Factoring/revolving BLOCs enable companies to sell accounts receivable to a licensed third party who then advances funds to the company based on the value of the invoices.
A factor earns interest on the principal amount and charges a fee for conducting the transaction. Once the invoice has been paid, the factor returns the balance to the company.
of Credit Loans
The business line of credit (BLOC) is a short-term unsecured loan offered by banks and other financial institutions to businesses. BLOC loans are commonly used for small to mid-sized companies that need money to meet working capital requirements.
Unlike traditional bank financing, customers do not have to put down collateral or provide personal guarantees.
fits of a BLOC Loan
There are several advantages to using a BLOC loan. First, it’s fast. Usually, the application takes only 10 minutes and approvals happen in less than 24 hours. Second, it requires no verification of assets or collateral.
Third, it comes at a significantly lower cost than any other type of loan. Fourth, it’s flexible. You can use the money for almost anything, including payroll, purchasing equipment, paying suppliers, or whatever else you need to run your business. And finally, if you’re approved for a BLOC loan, you get to keep the money you borrowed!
Business Line of Credit Loans (BLC) is a new type of small business financing that provides businesses with a fast, flexible and affordable means to fund their operations without having to sell assets.
BLC’s provide a quick access to short term loans of $25K-$200k at competitive rates and terms, based on the borrower’s business profile and industry. Businesses use BLC to finance working capital, inventory, equipment purchases, seasonal expenses, debt reduction, expansion or other operational and strategic solutions.
- The loan amount depends on the type of the loan and the borrower’s risk profile.
- Monthly payments are interest only and do not have any prepayment penalties.
- No collateral is required.
- All borrowers pay back their loan in full, regardless of the current economic situation.
- There are no origination fees, application processing fees, or early payment penalties.
- Lenders receive the money upfront, before requiring the borrower to make any repayments.
- There are high approval rates and low default rates.
- Repayments are based on a pre-established repayment plan with fixed monthly installments.
- Loan approvals take just minutes!
- You don’t need to fill out lengthy applications; simply answer a few questions about your business and submit the online application to get started.
- We guarantee to lend you between $100 – $300K. Interest rate will depend on the size of the loan.
- Our loans are secured using the equity in your company’s accounts receivable, rather than cash or real estate. Therefore, we are able to offer extremely competitive rates and faster term lengths.
- We are proud of our track record of providing strong customer service and excellent outcomes.