If you have a company and you are looking to borrow money in the near future you essentially have two basic varieties of borrowing. The first is a onetime disbursement in the form of a loan. These can be useful for different reasons depending on the type of loan which you get. For example if you are looking to make a major purchase in the future such as additional real estate for your company then a traditional bank loan with a long-term and a low interest rate would be a very good fit. On the other hand if you are looking to borrow money very quickly for some type of emergency purpose, then a cash advance loan may be a much better fit. The second option you have is of course to get a business line of credit. Lines of credit work very much like loans with the notable difference that they can be used over and over again.
Often companies will only borrow money when necessary based on immediate need. This could be a neat which is a major expense or it could be an emergency expense. If you find yourself getting high interest loans for your company for emergency expenses then it may be a good idea to get a business line of credit. By obtaining this credit line in advance you remove the need to borrow under emergency circumstances. Although these credit lines will have higher interest rates than a traditional bank loan they can be used again and again and are not tied to a specific resource. So what does that mean to be tied to a specific resource?
Unlike a loan you can borrow against a line of credit over and over again. For example if you are approved for a $10,000 credit line then you are able to borrow this amount as many times as needed or any fraction thereof as long as you have made payments. So if you use $5000 of your credit line in one month and then repay that upon receipt of payment from your customers then you will have 10,000 available to you again. This can be a very powerful tool when dealing with major fluctuations in your daily expenses and will enable you to deal with emergencies in a more cost-effective manner and seize opportunities faster when they arrive.