A steady and sufficient cash flow is vital to the success of any small business. Having a line of credit gives you the assistance you need to manage your cash flow, and when it is unsecured, you don’t need to put up collateral. Here are some of the ways that unsecured lines of credit can help you grow your business.
Maintain Control of Your Capital
When you take out a traditional loan, you receive a fixed amount of cash that you must pay interest on within a specific time frame.
However, with unsecured lines of credit, you have continual access to the funds you need to bolster your cash flow up to a specified limit, and you only pay interest on the amount you use.
Some traditional loans specify the specific purposes for which you must use the funds you borrow, but unsecured lines of credit typically allow you to spend the money for whatever you need to benefit your business. Additionally, lines of credit offer a greater range of payment options so that you can adjust your payments to fit your revenue.
Handle Short-Term Needs
Once you have been approved for a business line of credit, you can access the funds almost immediately to meet any of your business needs. For instance, you can finance important new projects, repair equipment, and handle emergencies quickly and efficiently.
The interest rates on unsecured lines of credit are far lower than those on credit cards, making lines of credit a more desirable option if you want to save money. As long as you make your payments on time, your rates remain low, and you potentially acquire access to even more capital.
Improve Your Credit Rating
A favorable credit history with a business line of credit can improve your credit score. To ensure this, keep your balance low and always make timely payments.
For more advice on unsecured lines of credit, get in touch with Dhanani Funding.