U.S. Banks offers a wide variety of business loans to eligible U.S. companies. A business line of credit is a type of business loan provided by U.S. Banks. This article will briefly introduce what a business line of credit is, benefits that a business line of credit can provide, and when a U.S. company should consider a business line of credit.

A business line of credit is a flexible, revolving loan model that provides a fixed amount of capital to U.S. companies. U.S. companies with business lines of credit can use business lines of credit anytime, anywhere. U.S. companies may draw up to the total credit line with one or more times as needed from the business line of credit, and only pay interest on those amounts drawn. Business lines of credit are classified as secured and unsecured. Collateral generally includes accounts receivable, inventory, machinery, and equipment, real estate, etc. valuable assets. Compared with an unsecured business line of credit, secured business line of credit can provide higher loan amounts and lower loan interest rates. For example, U.S. Wells Fargo collateral-backed business line of credit has a credit line from $100,000 to $500,000, and an uncollateralized-back business line of credit from $5,000 to $100,000. Fees for a business line of credit include interest rates, draw fees, processing fees, late fees, termination fees, etc.

After applying for and receiving a business line of credit, U.S. companies generally receive the following three benefits:

1. A business line of credit allows a company to use funds as it sees fit. Companies can use business lines of credit to cover ongoing operating costs and cover cash shortfalls, etc.
2. The company can create and improve the company's business credit score through a business line of credit. A good business credit score helps the company get other kinds of bank loans in the future.
3. Compared with other loan models, business lines of credit generally offer relatively lower interest rates and more flexible repayment plans.

When a U.S. company's business or operations have the following six characteristics, it may consider applying for a U.S. bank business line of credit:

1. The company's short-term operating costs will increase, such as paying unexpected expenses, replacing inventory, purchasing office supplies, etc.
2. The company often encounters situations where customers fail to pay on time; such as, customers fail to pay accounts receivable for more than 30 days.
3. The company's business is seasonal, and additional funds are needed to maintain operations during the off-season.
4. The company is preparing to invest in a new project but is not sure how much the new project will cost.
5. The company considers preparing some emergency funds.
6. The company's business requires it to prepare a certain amount of funds to deal with the situation of future cash flow shortages.

Reference:
https://www.forbes.com/advisor/business-loans/how-to-get-a-business-line-of-credit/
https://www.lendingtree.com/business/reviews/wells-fargo/
https://razorpay.com/learn/why-is-line-of-credit-necessary-for-businesses/
https://managementhelp.org/business-line-of-credit
https://www.callawaybank.com/the-benefits-of-a-revolving-line-of-credit-for-your-business/
https://www.bankrate.com/loans/small-business/business-line-of-credit/#:~:text=A%20business%20line%20of%20credit%20is%20a%20flexible%20loan%20for,they%20replenish%20the%20funds%20available.
https://www.merchantmaverick.com/how-to-get-a-small-business-line-of-credit/