Business Lines of credit are on-demand loans generally guaranteed by the lenders. The repayment is short term, ranging from six months to a year, and can be straight, fixed, or revolving in nature. Revolving lines of credit allow a company to borrow a particular amount for a particular period with no fixed payment terms. The cost for a revolving line of credit is based on an adjustable market-based interest rate. Straight lines of credit are short-term loans with a large payment paid at the end. Fixed lines are short-term loans with the payments based on the revenues from the company.

The Advantages
Business lines of credit are an excellent way to obtain extra funds when the company needs them, whether it is to meet seasonal inventory demands, remodeling of the office space, or any other short-term financial need. They provide necessary funds to complete a project or make it through a cash flow crunch. They help with payrolls, accounts receivables, accounts payables, short-term business expenses, and working capital. With this type of credit the company pays the interest for the outstanding monthly installment based on the funds used. Read the rest of this entry »