To get a business line of credit in Richmond, KY through Ledgecrest Lending, an owner calls or sends the request form, a funding partner reviews the business and decides whether to offer a line and at what limit, and the owner then draws only what is needed. This article walks through those steps, what may secure a line, how an invented hearing clinic picks a limit and what its first month of draws costs.
The steps from request to first draw on a business line of credit, review dates and renewals, an invented Richmond, KY hearing clinic setting a limit from six months of order gaps, and the clinic's first month of draws, daily interest and one pay-down.
How to get a business line of credit through Ledgecrest Lending
- Call (859) 461-8654 or send the request form with the amount the line is meant to cover.
- A funding partner may ask for recent bank statements, the latest tax return and how long the business has run.
- The partner decides whether to offer a line and, if so, its limit, rate, fees and any security.
- Once the owner signs, the line is open; interest starts with the first draw, though some lines may carry fees from the start.
- Each draw is paid down from the business's own deposits, and the room it frees can be drawn again.
A line of credit is not a lump sum. The limit is the most the business can have drawn at one time, and interest runs only on what is drawn. The line of credit page has more draw cases.
Review dates and renewals: how long a business line of credit stays open
A business line of credit may run for a set term, such as a year, and come up for review before it renews. At a review a partner may keep the limit, change it or close the line, and some agreements charge a renewal fee, so the review date and any fee are worth asking about before the first draw.
A partner may also ask what, if anything, secures the line; that answer is set out in its offer. Other ways to borrow are on the business loans page.
Choosing the limit from the largest gap in six months
A limit set too low runs out in the one week it is needed; one set far above the gaps may carry fees on room that sits unused.
Invented case: a Richmond, KY hearing clinic pays the manufacturer when it orders a patient's hearing aids and collects from the patient at the fitting about three weeks later. Over six invented months, the most it had paid out ahead of fittings at one time was $14,600.00. The clinic asks for a $20,000.00 limit in this invented case, which leaves $5,400.00 above the largest gap for an order that runs long.
A gap that never closes, where the balance stays drawn month after month, points to a working capital loan or a term loan instead, since a line is meant to come back down.
A month of draws, interest and pay-downs on the statement
Interest on a line is figured on each day's balance, so the month's statement shows draws, pay-downs and interest by date.
| Day | Draw or pay-down | Balance after | Days at that balance | Interest |
|---|---|---|---|---|
| Day 1 | Draw $6,200.00 | $6,200.00 | 8 | $18.75 |
| Day 9 | Draw $4,400.00 | $10,600.00 | 13 | $52.10 |
| Day 22 | Pay-down $6,200.00 | $4,400.00 | 4 | $6.65 |
| Day 26 | Draw $3,900.00 | $8,300.00 | 5 | $15.69 |
In this invented month the clinic's interest comes to $93.19, the month closes with $8,300.00 drawn and $11,700.00 of the limit still open. The statement may also set a minimum payment; paying more than the minimum lowers the next month's interest.
A line may also come up for review on a renewal date in its agreement, when the partner may keep, raise or lower the limit based on how the line was used.
By Ledgecrest Lending · Updated
