Having a Business Lines of Credit Before You Need It

Business Lines of Credit

A business line of credit is similar to a personal one in that it is a revolving credit line that is available for use as needed. Unlike a loan, the line of credit does not automatically close once all payments have been received. Instead, the business can draw from the line of credit and repay it as many times as in needed. When money is drawn from the business line of credit, interest is charged on that money at the agreed upon rate.

In order to qualify for a business line of credit, it is recommended that a business first establish credit with the companies that it does business with on a regular basis. This will boost the credit rating of the business. Once the business can show 18 to 24 months of a good financial history, an application can be submitted for a credit line.

This is usually all that a business needs to get started with a new credit line. It is advisable to get this line of credit setup as soon as possible so that it is available to the business, even if it is not yet needed. Since the interest rate is only charged when money is borrowed from the credit line, and only on the amount actually borrowed from the credit line, it does not cost the business anything to have an open line of credit.

When emergency expenses arise, or if banks tightening their lending restrictions right when the business needs cash, the line of credit will be there waiting on you to access it. This easily accessible capital will give you peace of mind as well as offer the business a safety net in the event of unexpected bills.

To apply for funding for your small business, use the form on the right to begin the application process.

For more information, go to Business Line of Credit at http://www.unsecuredbizloan.com/business-line-of-credit

Having a Business Lines of Credit Before You Need It was last modified: February 27th, 2012 by Amit Kraidman
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