As you grow a small business, having access to funding without needing to apply for it can be beneficial. A small business line of credit offers that funding access. A line of credit is different from a business loan and can actually save the business money. With this type of funding, the business is approved for a certain amount of money, which makes up the credit line. Unlike a loan, the business does not have to take the entire balance of the line of credit at once.
Instead, the small business can tap into that line of credit as needed, which allows the business to reduce interest expenses since interest is only charged on the amount taken out of the credit line. What is great about a small business line of credit is that it allows the business to anticipate future needs by get financing in place ahead of time so that there are no delays when funding in needed.
Qualifying for a line of credit can be difficult for a new small business because the business track record is used to determine eligibility. A business credit line can be either unsecured or secured, which can help a business with proven history to obtain the needed line of credit.
Business line of credit interest rates can vary, just like they can with a small business loan. However, the rates are generally lower than those of a credit cards. AllBusiness.com notes that a small business credit line is beneficial as an emergency fund for a business. It can also be used for times when the amount of money needed is too small for a conventional loan but too high to fit on a credit card.
While credit lines usually have a yearly maintenance fee, the business can keep the credit line open for as long as needed. This means that the business can borrow from the credit line repeatedly, which means that there is always access to funding.
For more information, go to Business Line of Credit at http://www.unsecuredbizloan.com/business-line-of-credit/