As a business owner in this current climate, financial flexibility can sound like a luxury. However, there may be resources available to you that provide just that – one of them being a line of credit.
When leveraged, these funds can be used at your discretion just like a flexible, open-ended loan. And it might be able to help you close the gap between bills that need to be paid today and when customers pay you tomorrow, next week or next month. Senior Vice President and Commercial Lender at Rockland Trust Jim Gavin recently helped one customer, Brighton Marine, successfully secure a line of credit through the company’s investment portfolio.
Who is Brighton Marine?
A nonprofit established in the 1980s, Brighton Marine supports uniformed services members, retirees, veterans and their families in Greater Boston through health services, the development and management of mixed-income housing and other support services.
How did Rockland Trust Help Brighton Marine?
At a local zoning meeting, Jim saw Brighton Marine’s presentation about a project to house homeless veterans. Because Brighton Marine’s local knowledge and passion for the development pairs perfectly with Rockland Trust’s expertise, Jim spoke with Brighton Marine about how the bank could help with the project.
There are many factors that go into deciding what type of line is best for your business’s unique needs. Brighton Marine had initially thought that a real estate backed line of credit was necessary, but through various conversations, Jim suggested using their investment portfolio to back the line of credit. This adjustment to collateral saved Brighton Marine thousands in closing costs and also lowered the interest rate.
Real estate secured lines of credit involve appraisals and attorneys, which add to the cost of the loan and the time it takes to close. In contrast, a line of credit secured by an investment portfolio takes some paperwork, but can close a little more quickly and usually includes a lower interest rate.
How Do I Get a Line of Credit for My Business?
A lender will look for a track record of income, meaning business tax returns that show income and expenses. Because lines of credit are secured, a lender will also look for collateral which can come in many forms like inventory, investment portfolios or real estate. For any financing questions, it is best to work directly with a lender.
As Jim put it, “It is better to come to us before you need the money, because a line of credit is a great option to have in your back pocket to increase your financial flexibility.”
Jim advises that businesses be ready and willing to share their story with their banking team, which should outline your historical track record and where the business is going, particularly in these challenging times.
Your banker and lender should be members of your team of strategic business advisors, who can help you figure out exactly what you need. Rockland Trust’s bankers and lenders have years of experience helping business owners like you. Our Learning Center offers great advice for business owners, as well as insights from your peers to inspire solutions for your business.
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