What Can You do with an Unsecured Line of Credit?
Running a business or expanding a current company is always an costly venture. The first way most owners think of to raise capital is through a loan, though this isn’t always the best option. While a business loan can offer you a great deal of money up front, an alternative is to get financing when you need it. This is where business credit is effective. An unsecured line of credit can offer you the opportunity to get funds when you need them and repay as that capital is used instead of receiving a lump sum and paying interest throughout the life of the loan.
The benefits of a line of credit can come in many forms. They can allow you to purchase inventory on an as-needed basis. Instead of procuring a year’s worth and finding ways to alleviate large warehousing costs, you’ll have the option of getting only the inventory you need at the moment, and resupplying when you need to, alleviating wasted time, space, and money. If you need specific machinery for an upcoming project, you can purchase it on a line of credit, allowing you to build your fleet of vehicles and equipment as your business grows. You don’t have to try and guess what your clients will need far down the road when you have the option to get the right equipment at the right time.
Another benefit includes taking care of monthly expenses. While waiting for your clients to fulfill payment on your invoices, you can access your business credit to pay for your website or property costs. If you lease vehicles or equipment, a line of credit gives you the freedom to pay them on time, with a single remittance to the creditor each month. In addition, when your contract payments are finalized, you have the option to take care of the credit in a lump sum, lessening the interest burden you would face in the future.
Perhaps the most important reason to look towards an unsecured line of credit is that it isn’t backed by equity. Taking advantage of your good credit score and continual payment of previous debt, you won’t need the backing of personal or business property to access funds. This leaves the control of your company in your hands, instead of forcing a lean on your business, adding stress to an already demanding task.
When looking for additional funds to run your business, think first about obtaining an unsecured line of credit. If you and your company have excellent credit history, it can be the path to making your business an even greater success.
