A commercial business line of credit also known as an operating loan is a pre-approved amount of funds issued by a bank that your business can access at any time. Collateral is not usually required unless your business has poor credit ratings. If that is the case than be prepared to provide collateral or a personal guarantee. The amount you qualify for is based on your company’s cash flow and credit ratings.
Whereas a secured line of credit requires collateral this type of credit line is based on the creditworthiness of your company. Before you apply, check your business credit ratings with all three major bureaus. Your company’s creditworthiness indicates your ability to meet and honor financial obligations, both today and in the future. Since a lender will review your company’s credit history, revenues, and bank references you will want to be fully prepared prior to applying. Having a commercial line of credit protects your company against the unexpected because the funds can be accessed whenever needed.
This is more convenient then having to apply for a loan which takes time or applying for a cash advance against your receivables. A commercial line of credit can be used for: Purchasing new equipment Building renovations Business expenses Upgrading equipment Improving cash flow This can be an invaluable tool for financing your short-term capital needs. Your business can borrow, repay and re-borrow up to the approved credit limit with flexible repayment terms.
You will no longer need to apply for a loan every time you need to raise funds. It also eliminates the risk of over borrowing since the money you access from your credit line would only be the amount that you actually need. Before you decide to open a line of credit take the time to learn all the types of credit lines that are available. Whether you have less than perfect credit, a seasonal business, collateral, or strong financials, there may be a specific type of credit line that is better suited to fit your needs and that of your business.
Unsecured Bad Credit Personal Loan
