Business lines of credit can help your company maintain positive cash flow during seasonal downturns or when you have higher than normal expenses. It’s just one of many alternative financing options available to you as a business owner. However, it’s essential that you understand what business lines of credit are and whether this is the right choice for your business before proceeding with your application.
Understanding Business Lines of Credit
Obtaining a line of credit for your business is similar to using a home equity line of credit or a personal credit card. You can use funds up to your credit line for any purpose you see fit. Upon making a payment, your balance decreases and the amount of credit available to you increases. You only pay interest on the amount of the credit line you use and not the credit line itself.
Benefits of Choosing This Financing Option Over a Bank Loan
Compared to a traditional business loan from a bank, the interest rates charged on business lines of credit are much lower. With a bank loan, you pay interest on the entire disbursed sum. Should you need additional financing in the future, you need to apply for another bank loan. This isn’t the case with a business credit line. You can use it over and over to meet your company’s financial needs.
These benefits give you the greatest flexibility and control when it comes to accessing needed funds for your business. You typically don’t need to pledge collateral unless the lender assigns you a very high credit line. Knowing that you have the funds available without having to go through a long application and approval process with a bank can also provide you with valuable peace of mind.
Are Lines of Credit Right for Your Business?
If the above benefits sound good to you, now is the perfect time to begin your application with OneClick Commercial Funding. We invite you to contact us today to learn more or request an initial consultation.