A small business line of credit is a financial tool that shares similarities with a business credit card. Unlike a term loan, a small business line of credit does not provide a lump sum of cash that requires a monthly repayment schedule. Instead, it offers the borrower access to capital up to a certain amount. A business line of credit has grown in acceptance to become one of the most sought-after financing options for small business owners.
Why businesses need a business line of credit
Businesses need funds to operate and expand. However, they do not always have enough cash to meet their financial obligations. One of the funding tools used by businesses is the business line of credit, helping them to handle their cash flow challenges with relative ease.
Some of the uses of business line of credit include:
Pros of Getting a Business Line of Credit
Cons of Getting a Business Line of Credit
Requirements to get a business line of credit
Here are some common requirements for getting a new business line of credit:
One of the major characteristics of this funding option is that the business line of credit rates have been discovered to be relatively low compared with other available options.
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