Commercial Business Line of Credit!

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.

Personal & Business Startup Loans For People With Bad Credit

According to the good folks at FICO, the credit scoring developer, approximately 25% of the US population qualifies as having poor or bad credit. For these people, borrowing money from a bank can be a time consuming and frustrating chore – if they can even qualify. Once a person’s credit dips below the 600 level, they are no longer considered a “prime borrower” to lenders and thus are considered a "high-risk borrower" and fall into the subprime category.

What Is A Bad Credit Loan? Is it different than a payday loan or short-term cash advance?

To meet demand, the credit industry created more flexible and relaxed borrowing guidelines for people with no, limited, fair, poor and bad credit. The resulting loan, also called a payday loan or “cash advance”, is typically a short term unsecured personal loan with higher interest rates and fees. Advocates support these loans citing they are fast and relatively easy to obtain and can help people deal with life’s unexpected financial emergencies. Critics claim that people pay too much in fees and interest and risk spiraling further into debt if they can’t repay the loan on time and in full and/or borrow repeatedly (read about the “Hamster Wheel effect”).

How Do Bad Credit Loans Work?

A bad credit unsecured loan works when a consumer (with less than “good” credit) agrees in a contract that they will repay the principal loan amount, plus and interest and fees, in short order – typically on or by their next payday. In most cases, a borrower needs to be employed with payroll records and have a checking account at a US bank. They pre-date a check when applying online and funds are then automatically withdrawn from their checking or savings account on the pay date.

All lenders are directed by law to disclose all the fees and interest penalties beforehand without any hidden conditions. Loans are not available in all states and borrowers should be sure to understand all terms including any fees or charges associated with late payments, the non-payment of a loan and the repeated use, renewal, and extension of any loan. The general borrowing range for this type of loan is $100 - $1000 USD. The Federal Deposit Insurance Corporation (FDIC) and the Consumer Financial Protection Bureau (“CFPB”) are two federal consumer governmental agencies that oversee various aspects of the finance and credit markets.