How a line works day to day
A line of credit gives a business a pool of funds it can draw on when needed and repay as customers pay. You use it for the stretch between spending and being paid, and you put it back when the money arrives. For a business that has the same gap every month or every quarter, it is usually a better shape than taking a new lump sum each time.
San Jose's long supply chains
Wikipedia calls San Jose the "Capital of Silicon Valley", a motto adopted in 1988, and notes that the city became a Foreign Trade Zone in 1974. Whether a company is a component supplier, a contract manufacturer, a distributor or a services firm that sells to larger technology companies, it usually pays its own suppliers well before it is paid. Larger customers set payment terms, and smaller suppliers live with them.
| Role in the chain | What it pays first | When it gets paid |
|---|---|---|
| Small parts or assembly shop | Materials and labor | After delivery and invoicing |
| Staffing or IT services firm | Weekly payroll | On the client's payment cycle |
| Importer or exporter | Goods and freight | After sale to the end customer |
| Local restaurant near an office park | Food, staff, rent | Daily, but with swings |
When a line is not the answer
A line is not a solution for a permanent loss or for a single large asset purchase. For the second, equipment financing ties the amount to the item. If the need is a one-time boost, working capital or a term loan may be simpler. The line works when the pattern repeats and the money comes back.
A worked example, for illustration only
Round numbers, not our terms or a typical result. A San Jose contract assembler spends about $30,000 a month on parts and wages for one customer, and the customer pays 50 days after delivery. The assembler therefore carries roughly seven weeks of cost at a time. If the same pattern repeats with a second customer, the carried amount doubles. A line of credit sized to cover the real carrying cost, rather than a hopeful guess, is what keeps the owner from borrowing against the next job just to cover the last.
Good habits
- Match each draw to a specific invoice or order.
- Repay as the customer pays, and avoid leaving a rolling balance.
- Review the pattern every quarter. If you are drawing more often, ask why.
How to apply
We consider FICO scores of 500 and above, ask for about three months of business bank statements and require no tax returns. The application takes about five minutes with a soft credit pull. Funding runs from $25,000 to $5,000,000 and can arrive in as little as 24 hours. Sole proprietors can apply. Apply here. The San Jose tech funding page covers the sector in more depth, and the Santa Clara County overview adds regional context. Owners in Milpitas, Sunnyvale, Santa Clara or Cupertino can apply too.