LINE OF CREDIT
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What Is a Business Line of Credit?
A business line of credit is a method to sustain success when your business needs to establish consistent cash flow to pay employees, cover costs or invest in projects that will grow your company.
This type of financing gives your business a revolving line of credit, meaning you can spend and payback — as well as reuse — capital as needed.
Business lines of credit give you the capacity to handle emergencies and opportunities equally, offering the peace of mind and security you need to manage your cash flow best.
How Does a Business Line of Credit Work?
A business line of credit works similar to a credit card. The line can be used when needed and as you pay down your debt, your credit line is replenished, up to the original credit limit. The main features that make a small business line of credit attractive are purchase and payment flexibility.
Repayment terms generally fall within the 6-month to 3-year span, and credit limits are typically higher than their credit card counterpart.
Business Line of Credit vs. Credit Card
While a small business line of credit and a business credit card may seem similar, there are three distinct differences between the two.