Improving your business credit score is important, because it is how you get access to great credit products. Some of those products include: business loans, letters of credit, business credit lines, term loans, and bridge loans. In this article, we go into more detail about business credit lines.
A business credit line is a revolving loan that lets you borrow money in the future if and when you need it. You do not have to borrow the money, if you decide not to. When the business credit line is issued, it will have a limit, which is the maximum amount that you can borrow. It is meant to be used to meet short-term financing needs.
Once you have the credit line, you can borrow (up to the credit limit of the line) when you need to. You can then pay it off and borrow again, usually as many times as you want during the full term of the line - that is why it is described as being “revolving.” While there are many similarities between business credit lines and business credit cards, business credit lines typically have lower interest rates and higher limits, and can therefore be advantageous.
There are many ways in which you might want to use a business credit line. Here are some of them:
In summary, a business credit line is a cash flow management tool that can help your business function more profitably in a wide range of situations.
There are costs involved in setting up a credit line, as well as possibly transaction fees and monthly fees, so be sure to review any related costs carefully. If you need to borrow money for a longer term, another credit product may be more cost-effective.
When you work with Scorico to improve your credit score and business, your business becomes more financially successful. Sign up to be a beta tester today.