Your Guide to Unsecured Business Lines of Credit

You may have heard it said that you have to spend money to make money. What if, however, you don’t have any money to spend? If that describes your financial situation, you may benefit from an unsecured business line of credit. Unlike a secure credit line, and unsecured loan or line of credit does not require collateral. You simply fill out the paperwork and see the amount of credit for which you qualify. Unsecured credit does require discipline on your part for it not to get out of hand, but if you apply that discipline, it can have several benefits.

 

An unsecured business line of credit gives you fast access to money you can use for whatever your business needs. You can use it as a credit card or take out a certain amount of cash to make a particular purchase. It is particularly helpful to have a line of credit when unexpected expenses come up. If, for example, an expensive piece of equipment that is necessary for your business breaks down, you will need to have the money to replace it as soon as possible. Having an open line of credit helps keep your business running smoothly.

 

Another benefit of an unsecured business line of credit is its fluidity. Instead of paying a loan back in installments, you can pay the whole amount, the minimum amount due or a partial amount every month. Then you have more credit to approximately the same extent that you have paid. It is not just a one-time loan that you use and then pay back. You constantly have the opportunity to borrow whatever amount is left on your credit line.

 

When used responsibly, an unsecured credit line just makes good business sense. It separates your personal credit from your business credit, which protects each one from the other. Paying consistently and on time each month also helps you build a separate business credit score, which can help you qualify for other loans you might need for expansion or some other reason in the future. Good business credit gives you an edge when it comes to negotiating terms of future credit applications.

 

If you don’t have a lot of extra cash flow or if you don’t have any collateral you would be willing to put up against a loan, do not despair. An unsecured business line of credit can be your saving grace. It can get you the fast cash you need to make your business more profitable and successful.

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