A business line of credit is another popular small business financing tool.
Unlike a term loan, a line of credit is a source of funds that the small business owner can draw against when the need arises.
Business Line of Credit
How it works
Business line of credit interest rates range from eight to twenty-four percent. The higher your credit score the better your rate will be.
A traditional line of credit with a rate as low as prime+ can be obtained with a 680+ credit.
If your credit is challenged at the moment then a non-traditional loan can give you a good option with higher rates.
What business line of credit is good for?
As a small business owner it is nice to have access to cash when you need it. A business line of credit is very similar to a business credit card.
A line of credit is a good option to offset the “ups and downs” with business. This type of financing is meant to provide a helping hand to a solid business with a proven ability to repay the loan.
What are the requirements?
Generally, most small businesses can qualify for a business line of credit if they have a credit score of 500 or higher.
You will need to show your tenure in business and provide collateral to back the loan.
What is the cost?
Line of credit interest rates range from 8 to 25 percent.
The higher your credit score the better your rate will be.
A traditional line of credit with a rate as low as prime+ can be obtained with a 680+ credit.
If your credit is challenged at the moment then a non-traditional loan can give you a good option with higher rates.
