As a small business owner, you will undoubtedly have cash flow problems from time to time. One solution to obtaining funding to keep your business growing is to apply for an unsecured business line of credit. Here’s how unsecured business lines of credit differ from term loans.
A term loan means you receive the total sum of the loan and then you have a set period of time (the term) in which to pay it off. You have to pay back the amount borrowed (the principal) and you also have to pay interest. If it transpires that you didn’t need all of the money, you still have to pay it back plus interest.
Unsecured Business Lines of Credit
Unsecured business lines of credit are much more flexible than term loans. You access just the amount of cash you require whenever you need it and not when you don’t. Unsecured business lines of credit don’t come with any term and you only pay interest on whatever credit you actually use. Interest rates on unsecured business lines of credit tend to be lower than on term loans.
Unsecured Business Lines of Credit and Banks
Getting an unsecured business line of credit from a bank can be next to impossible for a small business owner. The application process involves extensive paperwork and a long waiting time. And, if you manage to get one, you will be subjected to an annual financial review to ensure you can still maintain the line. A business credit card is also difficult to obtain from a bank if your business credit score isn’t high enough. Also, cash advances from business credit cards can be pretty expensive.
Obtaining an Unsecured Business Line of Credit from an Alternative Lender
It’s possible to obtain an unsecured business line of credit with fast approval time from an alternative lender. So, if you’re ready to finance your business give IRC Commercial Lending a call. We can advise you on unsecured business lines of credit and possible alternative solutions to solve your cash flow problem.