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With the banks bailed out and credit opportunities once again available, good lines of credit are hot for the chase. Business line of credit applications are being filled out once again, and it is essential to know whether the bank line of credit option is indeed right for your financing needs.

First, what is a line of credit? Lines of credit are very similar to credit cards, that is, they are revolving lines of credit that are open ended and flexible for spending purposes. Lines of credit are issued by banks, and often take the physical form of check books; credit payments are made with checks that link directly to the users line of credit. Lines of credit are most commonly known through personal equity lines, which are by a person’s home equity, and are usually a very profitable and safe venture for banks.

A business line of credit follows some slightly different rules. It is, naturally, based on the security of a C-corp or LLC, and primary consideration for the loan is given by the Dun & Bradstreet Paydex score. Typically, smaller banks are more liberal in their lending practices than larger ones; if for example, you want to apply for a line of credit from Chase bank, for instance, you will have to go to the bank and complete a Chase business line of credit application.

Lines of credit are an excellent way of both financing the things you need for your business, and helping you build business credit for later and greater opportunities, especially during the tough times of the business’s start up period.

This Business article was written by Mark Karavan on 1/13/2010