JTB:: Secured Lines of Credit-Revolvers

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Secured Lines of Credit - Revolvers

Secured Lines of Credit, also known as Revolvers, are loans that are repeatedly drawn down and repaid. Usually, the loan is secured by the company's receivables and/or inventory, (although there are circumstances when the lender releases its interest). This kind of asset-based loan is designed to optimize the availability of working capital from the borrower's assets. The minimum line of credit size is generally $100,000 with no maximum.

Secured lines usually require a personal guarantee of everyone holding 20% or more of the company. Companies generally take the secured revolver alternative when they cannot obtain an unsecured bank loan which, when added to their normal cash flow, would satisfy their working capital needs.

Unlike other financing sources, our lending facilities are more broad, as we include collateral not general accepted by the banks, (ie, government contracts, service contracts, etc.) As a result, our approval amounts are a lot higher since the borrowing base is also a lot larger.

Virtually any business to business company in almost any industry uses revolvers, however they are particularly popular among retailers, wholesalers, distributors and manufacturers because these types of companies can benefit from a cost effective source of working capital, and have specifice types of assets that can easily pledge as security.

The process is fairly simple, though not as seamless as unsecured bridge loans. The company grants a secruity interest in its receivables and/or inventory to the lender as collateral to secure the loan. This grant of security interest creates the borrowing base of the loan. As receivables are paid, the cash is turned over to the lender to pay down the loan balance. When the borrower needs additional working capital, the borrower requests another advance. Because the borrower's customers are generally not notified of the assignment of the accounts to the lender, the borrower continues to service its receivables. The borrowing arrangement is usually transparent to the borrower's customers.

Secured - Revolving Lines of Credit Information:

� Pricing for revolvers is a function of the size of the credit facility and credit quality of the company;

� Moderately strong credit quality companies seeking a facility from $1 million, can expect interest rates between 8% to 12%;

� Superior credit seeking in excess of $10 million, can expect an interest rate of 5% to 8%;

� Most other credit facilities sizes can expect an interest rate starting at 12%.

To learn more about revolving lines of credit, call us to assess your company's fundability based on available product/service committments.

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JTB Associates LLC CPA is an Illinois based certified public accounting and business consulting firm. JTB Associates CPAs provides core accounting services, like payroll, and funding solutions, such as leasing, raising business capital, unsecured lines of credit, merchant loans, merchant advances, and vendor financing programs. Our services transcend accounting to building, raising, obtaining working and expansion capital for start up and established businesses. JTB is nationwide, local area is Illinois communities like Serving the Chicago metropolitan area Northbrook,Grayslake,Wheaton,Naperville,Skokie,Oak Brook,Springfield,West Chicago,Rolling Meadows,Oakbrook Terrace,Crystal Lake,Wilmette,Highland Park,Gurnee,Libertyville,Elgin,Elkgrove Village, Elmhurst . JTB Associates, LLC is a Certified Public Accounting Firm and Business Consulting Firm based in Chicago, Illinois.