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Credit lines for business (as well as personal credit lines) come in two primary forms: amortized credit and revolving credit. Typically, amortized credit is used to large, definite purposes (construction loans, real estate purchases, vehicles, etc) while revolving credit is used for large sums of small purchases, for which a greater deal of flexibility is required. This article will give you some info on business line of credit.
There are two main kinds of revolving credit: credit cards, and bank-issued lines of credit. Credit cards are, of course, the most common and have rapidly replaced the checkbook as the dominant non-cash method of transaction that we use today. Business credit cards are very similar to personal credit cards, although they tend to carry higher interest rates and have significantly higher balances. There are over 500 business credit cards available and can be compared online at www.cardratings.com
Business lines of credit function very similarly to credit cards, but are issued by banks themselves and come in the form of a checkbook; simply write checks on the credit line to access the account, and cash will be deducted from the line of credit. Lines of credit may be secured or unsecured, meaning that they may require some form of collateral (in the form of a savings account or property title), or they may require nothing. In the case of the latter, unsecured, the interest rate will tend to be higher because the bank is taking on more risk. While large banks typically offer lines of credit with the largest balances and the lowest interest rates, you may also want to consider smaller banks and credit unions as your go-to source for business lines of credit if you are having difficulty with the larger banks. You can find info on business line of credit at www.business.com.
