There are many instances where small business owners need to borrow money to address a financial shortfall. Maybe there is a need to cover payroll. Maybe there is a need to purchase additional raw materials to cover an unexpected order. Whatever the reason, small business owners have a range of options to choose from when it comes to borrowing money. One of the best tools out there for small businesses is a revolving line of credit.
What is a Revolving Business Line of Credit?
A revolving line of credit is a loan that carries the characteristics of several different types of loans. For example, a revolving line of credit offers you the ability to borrow and reborrow the funds from the loan as you pay back the balance, much like a credit card does. This means that the money you need is available for use whenever you need it. However, the funds are deposited into your bank account rather than being tied to a piece of plastic, which offers a great deal more flexibility than a credit card when it comes to funds usage.
An additional benefit is that with a revolving line of credit, you are approved for a certain amount of funding, just like with any other type of loan. However, you don’t have to use the funds all at once. You can dip into the loan funds when you need them and only use what you need at the time.
What Are the Repayment Terms for a Revolving Business Line of Credit?
Unlike a fixed installment loan, a business line of credit doesn’t have a fixed repayment schedule. What you repay and how you repay it will depend on your cash flow as well as how much you borrow. For example, if you borrow $2,000, you can choose to repay the entire amount the next month or you can break it up into regular monthly payments until the balance is repaid. There will be a minimum payment assigned to the loan, but so long as you are meeting that minimum, you can pay back whatever amount works for your company’s budget.
How is a Revolving Business Line of Credit Different Than Other Types of Funding?
A revolving business line of credit is a hybrid type of loan, combining the revolving balance and flexible repayment terms of a credit card with the spending flexibility of an installment loan. These small business lines of credit offer small business owners the best of both worlds when it comes to funding options.
Business Line Credit Hub can provide you with a revolving line of credit that your business can use to move it forward. A friendly, knowledgeable representative will sit down with you and help you obtain the funding you need as well as explain all of the terms surrounding your loan. It is important that you understand the differences between all of the different options for business funding that are available so that you can make an informed decision about the right choice for funding for your business. Visit Business Line Credit Hub today to learn more about revolving business lines of credit and other business loan options.
Business Line Credit Hub offers you the ability to get small business lines of credit to help fund your business and make expansions. Visit today to learn more.