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Business Line of Credit
A business line of credit is a financial arrangement involving a pre-approved amount of money that is issued to a bank or other lending institution and a company to help them meet certain financial obligations. It is commonly used for funding the day-to-day business operations and is typically repaid once company funds are available. It is also referred to “business credit” or a “commercial line of credit.”
As a more flexible type of financing, companies typically use a business line of credit for expanding a business, improved cash flow management, or to pay off other unexpected expenses. Biz4Loans offers these lines of credit and can specially design them for any type of business.
Which Line of Credit is Right for Your Business?
The following chart describes three different business line of credit options. You can use this chart to determine which option best addresses the needs of your business.
|BLC-1 Small Business Advantage Line of Credit||BLC-2 Business Line – Line of Credit||*BLC-3 Express Equity Line of Credit|
|This Solution Offers||An unsecured line of credit backed by the Small Business||An unsecured line of credit with no expiration||A Real Estate – secured revolving line of credit with low rates to use for many business needs|
|Ideal For||Established businesses 2 or more year old||Established businesses 2 or more years old||Businesses that own their real estate|
|Rate||Variable Rate tied to Prime Rate||Variable Rate tied to Prime Rate||Variable Rate tied to Prime Rate|
|Credit Amount||$5,000 to $100,000||$10,000 to $100,000||$50,000 to $500,000 (up to 70% of the property value)|
|Collateral||None – it’s unsecured||None – it’s unsecured||Secured by business or investment property (No Second homes)|
Advantages of a Business Line of Credit
The advantage that you have with a business line of credit compared to a business loan is that there is usually no interest charged on the unused or remaining portion of it. Another advantage of this type of funding is that it allows you to access only the funds you need unlike a business loan that requires taking the entire amount all at once. So you can draw a portion of your line of credit whenever you need to do so and then pay that off once your company has generated the amount of income you need for that purpose.