As a business owner, you might prefer an always-ready line of credit to a traditional business loan in many cases. If you have good credit and/or a well-established company, you could qualify for a secured, or unsecured, business line of credit.
Benefits of Business Lines of Credit
Among their unique advantages, lines of credit are:
- Conveniently re-usable: The un-used part of your line of credit is available to you consistently. You can repay, then borrow again up to your credit line limit. With a traditional business loan, you would have to re-apply each time you have a need.
- Cheaper to use than a business credit card: Compared to using a credit card, a business line of credit typically carries a lower interest rate.
- Tailor-made for medium-size business purchases: For business needs too big for a credit card, the business line of credit, with its lower rate, often works well. The interest rate on a conventional loan may be even lower, so the business loan is often used for longer-term, larger purchases.
- Cash-flow management solutions: You could use your business credit line to create consistent cash flow. This can be helpful if you have a seasonal business or your sales cycle is long, for example.
- Helpful for emergency business needs: If you have a short downturn, you can use business lines of credit to maintain your company through a rough patch.
Lines of credit can be good to have in your business toolbox to offer you business funding flexibility. A business line of credit is not ideal for every business need, however. There are times you might want to consider a business loan, such as for long-term financing needs.
Learn more about business lines of credit and other funding options to fuel your company’s growth. Contact LMC Alternative Business Capital today.
