Business lines of credit are the most flexible type of financing you can possibly arrange for your business, and they are also very desirable because you can use the money in any way that you want. In addition, you are not charged for money like you would be on a loan, until you actually withdraw some money from your business line of credit.
Here are some of the various types of business lines of credit available to you.
Short-term loan
As it relates to a business line of credit, a short-term loan would entail a lower line of credit, along with a higher interest rate. The thing that makes a short-term business line of credit loan so appealing is that they are relatively easy to qualify for.
Medium-term line of credit
This type of business line of credit matches up pretty well with a traditional medium-term loan from a bank. It will generally involve a higher line of credit, and a lower interest rate, but it will provide you with more flexibility in terms of your purchase power, because the line of credit is higher. It’s a little harder to qualify for this line of credit, because the amount of money involved is higher.
Traditional business line of credit
This is the line of credit you would normally apply to a bank for, whereas the two previous types are more likely to come from an alternative lender. You can expect that the highest line of credit would be available in this type of loan, along with the lowest interest rates, but the requirements for approval make it much harder to obtain.
Other types of lines credit
There are three other types of business lines of credit available to you, each of which is a little different. Some alternative lenders will provide an invoice-backed line of credit with the maximum amount dependent on the value of invoices you put up as collateral. It’s also possible to secure an equipment-backed line of credit, which uses some type of business equipment as collateral for your line of credit.
The last type of credit line is the business credit card, which is in essence a line of credit that operates very much like the others – you use only what you need, and pay it back as quickly as possible.
Business lines of credit with 5-Star Funding Group
A business line of credit may be just what you need to inject consistency and reliability into your normal business operations.
Contact us at 5-Star Funding Group to find out how we might be able to help you achieve your business goals, beginning with a business line of credit.
