What is a business line of credit and how does it work?
However structured and planned your business is, you might face urgent need to raise funds at one point or the other. It could be for obtaining inventory, for maintaining cash flow or to meet any other short-term financial necessities. Business line of credit (LOC) could be an ideal option for you in these circumstances. LOC is a flexible funding option to help you strengthen your thriving business.
Business line of credit helps you meet your short-term cash requirements. A business line of credit is a revolving loan which means that you can use the money, repay it and use it again. The interest is calculated based on the amount you use.
There are two types of LOCs- secured and unsecured. In the case of secured LOCs, lenders require a collateral. But they often ask for short term assets like accounts receivable or inventory instead of capital assets. Unsecured line of credit does not require a collateral. A strong credit profile and a good business track record can qualify you for an unsecured line of credit.
If your business constantly requires ready access to funds to meet your short-term requirements, a business line of credit can be your ideal solution.
Benefits of an Fund MY Biz Business Line of Credit