Help Your Business with the Unsecured Line of Credit
Having access to credit for a business can be the difference between a business staying in business/thriving, and a business going under. There are basically 2 main financing sources that most small businesses use, and that is credit cards and lines of credit.
Small Business Credit Cards
Small business credit cards can be ideal for new entrepreneurs/business owners, since they are easier to obtain and offer some flexible options. Additionally, there are suppliers that accept payments through the use of small business credit cards. This would enable small business to be at par with other business and maintain the stocks with the materials needed for its production
Small business credit cards also have disadvantages. Such cons may exist in the requirement of guaranteeing the card by newly formed businesses. This is a common requirement for some credit card companies. And so, the credit card will appear on the company owners’ personal reports on credit.
As you review your business credit card, you should ask the credit card company if this will be reported under the business name or your name personally. However, there are several issuers that are open to putting it in the business name only if the owner has a good personal credit.
The Unsecured Line of Credit
For larger expenses, the unsecured line of credit is a more appropriate financial resource. The unsecured line of credit can also offer the same flexibility of a small business credit card but with a lower interest rate and a relatively bigger credit limit.
There are several creditors who offer secured line of credit but with lower interest rates. You would also need to use some kind of collateral as a protection against your debts. Through the use of an unsecured line of credit, the possibilities in relation with tolerating your assets to be utilized for security are shunned.
As compared to the application for a business loan, acquiring an unsecured line of credit is easier. On the other hand, in order for the unsecured line of credit to be approved, the company is still required to be able to present an excellent status in their business credit.
Maintaining and Building a Business Credit
If you are looking for a method to fund your business, it is important to consider if you will qualify for an unsecured line of credit. However, the business credit score should be reviewed and must be enough to acquire such credit. Fortunately, it is never too late to improve your score and doing the correct actions early, such as opening a business credit card account in the business name only would help you to see improvements on your score.
Building a good business credit is always emphasized whenever applying for a business funding. From the time you launch your business, it is important to make it your goal to establish your business credit and keep it in good standing.
When the time comes that you will need financing, you will easily qualify for an unsecured line of credit.
“The one place you will never find success, is inside of your comfort zone.” Marcus Jennings
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