A credit line is a ready source of financing, made available by a bank, that allows you to draw funds up to the limit of your line at any time and in an instant. The line is typically available for your use for a year, after which you can then apply for a renewal.

So what do you need to get a credit line?

First and foremost, your business has to be in good financial standing. Typically, this means that your business should have been profitable for at least the past three years. Plus points if there is an upward trend in profitability.

Plantersbank, which offers credit lines to bona fide small and medium enterprises, has three simple criteria for interested credit line applicants: (1) financial good health for the past three years (make sure you have legitimate financial statements), (2) a reputable pool of management, and (3) products and services that are not morally questionable. So if you are selling fake DVDs, then forget about it!

You will also need to produce collateral, of course, the most common of which is real estate or chattel mortgage. But if you’re a good bank client, then your bank accounts can serve as collateral. Capital assets that are to be purchased through the loan can also serve this purpose.

Sure there will be some paperwork and credit investigations at the start. But after the initial red tape, the nice thing about a credit line is that it will then allow you to draw quick funds in times of emergencies.

How much funds? It depends on your approved line of credit. In the case of Plantersbank, credit lines can reach as high as P30 million.