What a line of credit is for
A line of credit is flexible access to cash that you draw as needs come up, instead of one lump sum for one purchase. The idea fits a business where the timing of income and expenses do not match: you pay for supplies, wages and rent today, and customers pay later.
It is not the best tool for everything. A single known purchase, such as one machine, is often better matched to a purpose-built product. A line suits the recurring, uneven gaps in a year. At California Biz Funder we fund $25,000 to $5,000,000, and which structure fits your business is worked out when you apply, based on your statements and what you are trying to cover.
California is several seasons at once
One statewide product has to work across very different calendars. The same year looks different depending on where you operate.
- Central Valley agriculture. Packing, hauling, equipment and seasonal labor are paid for before harvest revenue arrives. The spending is front-loaded and the income comes in bursts.
- Coastal tourism and hospitality. Restaurants, lodging, tour operators and shops swell in the busy months and thin out in the quiet ones, while rent and core staff stay constant.
- Inland Empire logistics. Warehousing, delivery and light manufacturing deal with volume surges and customers that pay on long terms, so working capital gets tied up in receivables.
- Bay Area and Los Angeles services. Agencies, clinics, studios and contractors carry high fixed costs and bill in cycles, so a late client payment hits payroll directly.
Worked example: the slow-pay gap
For illustration only, and not our terms or a typical result: a Los Angeles design studio completes a project and invoices the client. Payroll and rent are due in ten days, and the client pays in forty-five. The studio has no problem, only a timing gap. A line it can draw on during that stretch covers the gap and is settled when the invoice clears.
Now compare a Central Valley packing operation that must hire crews and service equipment weeks before sales begin. The gap is longer and more predictable, so the owner may plan the draw ahead of time. Same product, different planning.
How the pieces compare
| Business pattern | What drives the cash gap | Why a flexible line may fit |
|---|---|---|
| Seasonal producer | Costs before harvest | Draw when spending peaks |
| Hospitality and retail | Quiet months with fixed costs | Smooth out the low stretch |
| Logistics and light industry | Slow-paying customers | Carry payroll until invoices clear |
| Professional services | Billing cycles | Cover timing, not losses |
A line of credit should not cover a losing business
Flexible credit solves timing. It does not solve a business that spends more than it earns. Before you draw, check that your sales, over the course of the year, cover your costs. If they do not, the line only postpones the problem. A good rule is to be able to say what income will repay each draw and roughly when it arrives.
What we need from you
We look at about three months of business bank statements. We do not require tax returns. We consider FICO 500 and above, the application takes about five minutes, and the credit check is a soft pull. Funding can arrive in 4 hours once you are approved. Sole proprietors can apply. When you are ready, start your application.