Business Line of Credit: What is it and why should you get it?
We have already discussed what is Small Business Loans and it is time to introduce other types of approaches under it.
Why don’t we start with Business Line of Credit.
Well, it is a kind of credit wherein you can have access to financial funds you can use for your business financing. It is like a wallet of money where you can take from in times you need it the most. What’s the beauty about it? You only pay the interest of the amount you borrowed. So, you can use the borrowed amount however you like it: pay employees, invest in business ventures, or pay business expenses, finance a marketing campaign, or even bridging periodic cashflow breaches. Isn’t it flexible?
Yes! In fact, a lot of businesses already use this type of credit approach to help them start up a business or to help them intensify their strategic methods to market their growth.
Now, you must know that there are two types of Business Lines of Credit. One is Secured and the other one is Unsecured. Let us now differentiate the two.
Secured Line of Credit means that you need to pledge personal assets as your collateral to avail this approach. You must understand that it is a short-term liability so lenders will have to ask for short-term real assets such as house, car, or lot area that can be liquidated to cash. If you are not able to pay the borrowed money, transfer of ownership to your collaterals will be of the lenders.
On the other hand, Unsecured Line of Credit can be availed without collateral. Yes, we know what you are thinking! Why not avail it when it doesn’t need any collateral? However, since you do not have anything to present as your second choice for payment, lenders find it risky because of unsecure credit lines. For this reason, lenders are going to give you lower credit limits, charging higher interest rates, shortening the payment period, and double checking your credit history background.
As an online lending financial institution, we offer fast transactions which is usually faster than banks or other conventional lenders. We are processing your credit limits within 24-48 hour-window.
Hurry up and think of the countless opportunities and bring them to life! You can be the next successful business owner by availing this Business Line of Credit.
Message us for inquiries and we will be happy to serve you!