Why an Unsecured Business Line of Credit Could Be Right for Your Company
How you cover costs when revenue stagnates is an important question. Some entrepreneurs turn to small loans while others look to liquidate assets and keep debt off the books. If your issue is the occasional dry spell and you feel compelled to have access to a little more capital, unsecured business lines of credit are often the ideal solution.
Easy, Fast Access
Borrowing a few hundred thousand dollars is probably the worst option when you don’t have a very specific plan for the money. Alternatively, a line of credit is there when you need it and you can use as much or as little cash as you choose. This makes it easy to finance projects and purchases at the last minute, and it also helps you avoid lengthy repayment terms and giant deficits on your balance sheet. As long as you pay attention to how much you’re using and take care of reimbursement, your financial needs will be met.
One-time borrowing usually doesn’t solve more than a single problem. Unsecured business lines of credit might not cover your biggest expenses, but this financing allows you access to funds for as long as you need them and remain a creditworthy borrower. In addition to helping with issues like cash flow and brief shortages in inventory, this can be the best way to build your business credit and make your company eligible for larger loans and lines of credit in the future, should you need the additional financing. In the meantime, modest funding will always be available when you want a little extra cash on hand.
No Strings Attached
Some entrepreneurs opt for a line of credit that is secured by an asset, but that can make financial matters a little murky and might lead to unnecessary headaches down the line. You may have to be careful about a high APR with an unsecured loan, but that’s a negligible problem if you’re smart about your spending and repayments. For the many small business owners who don’t have anything to offer as collateral, this might be the only legitimate option. Your business financing should never jeopardize your business, which is why this type of lending is well suited for so many small companies.
Depending on your financial needs, unsecured business lines of credit can be the perfect solution. If you have the credit history to get good terms and approach the funding responsibly, this financing can take your company to a whole new level of success.