Prime borrower question
Should I arrange a line of credit before I need it?
It can make sense to arrange revolving capacity while trading is strong if the business has a credible future peak need and the cost of standby liquidity is reasonable. It does not mean every profitable business should keep debt available.
What changes the answer
Forecast the lowest cash point and the timing of the peak draw.
Compare approval lead time with how quickly the need could arise.
What to check before acting
Include line fees, reviews and any security tied up by the facility.
- Use your actual balance, price, term and fees.
- Keep the comparison on the same time horizon.
- Check any tax-sensitive or contract-specific point against the current source document.
Run the numbers
Compare working-capital structures
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Compare working-capital structuresSources and verification
General information only. It is not personal financial, tax or legal advice. Finance approval, pricing and structure are subject to lender assessment and your circumstances.