A business line of credit is a financing option that businesses use for long-term financing goals. A business line of credit is a revolving line of credit that can be used time and again. As with every form of financing, there are common misconceptions about what a business line of credit is and how it can be used. Today, we will discuss some of the most common misconceptions business owners have about business lines of credit.
1. A business line of credit only works one time.
Business lines of credit can be used again and again. Business owners can withdraw all of the money or only a portion. As the balance is repaid, the business can borrow more money on the account as long as the total amount outstanding stays below the predetermined limit.
2. A business line of credit won’t affect your credit score.
This is not true. Each time you may a payment on the line of credit, your lender will turn in information about the payment to the credit bureaus. If your payments are on time, your credit score will slowly improve. If your payments are late or you fall behind, your credit score will fall. The lender may also file a lawsuit against you for nonpayment.
3. A business line of credit is the same as a loan.
Business lines of credit are not the same as loans. While you can use a loan only one time, you can borrow on a line of credit as many times as you want. When you obtain a loan, you must take out the entire amount at once. However, lines of credit allow you to borrow smaller amounts over time if it is more convenient.
4. You have to have an established relationship with a lender before you can get a business line of credit.
It is possible to qualify for a business line of credit from a lender who has never worked with your business before.
If you need help finding a lender for your business line of credit, consider working with UnsecuredBizLoan. Simply complete the simple form on our website and wait to hear from us. We will review your information and connect you with a lender capable of offering you the line of credit you need to keep your business successful in the future.
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