Business line of credit

What is a business line of credit?  

A business line of credit is a type of funding that allows a business to access money that can be used to  address any business expense that arises. With a business line of credit, you can access as little or as  much of your credit line as you need, when you need it. Unlike a small business loan, you are only  required to pay interest on the funds used, and the funds are available to be borrowed again as you pay  your balance. 

Why choose a business line of credit? 

The number one reason to open a business line of credit is to gain access to short-term funding. Most  businesses use these funds to support various business expenses, like supplies, payroll, and inventory.  Choosing a business line of credit is also a good way to help build your business credit rating and position  you for better loan terms in the future.  

Advantages of Business Line of Credit 

A business line of credit has two main advantages. Firstly, interest begins to accumulate only once you  draw funds. This means that you are only required to pay interest on the amount of funds used, as  opposed to on the entire loan. This can save your business a significant amount of money. Secondly, you  are not required to pay back the line of credit all at once. As you pay back the balance, the funds become  available for you to use again, so there is no need to re-apply for a new line of credit.