If your business is plagued with late customer payments and unanticipated expenses that always seem to be cropping up, you would probably benefit tremendously by having an unsecured business line of credit. Here are a few things to know about unsecured lines of credit.
What exactly is an unsecured line of credit?
With an unsecured line of credit, you as the borrower do not have to put up any kind of collateral to receive the line of credit. This of course, is preferable to a secured business line of credit in which you would have to offer some kind of collateral as security to the lender. The reason that collateral is not required in this kind of transaction is that a lender will already have some degree of security about your repayment, since the line of credit will not be extended to any company with less than excellent credit, and with high annual business revenue as well.
How it’s different from a term loan
When you borrow money from bank, you will receive the entire amount at once, and then you’ll have to repay that amount over a term usually consisting of several years. Unsecured lines of credit on the other hand, provide you with a maximum amount of money which is made available to you, but until you actually use that money, nothing needs to be repaid. When you do draw out some money, and then repay it, your original balance gets restored.
Typical purchases using a business line of credit
Generally speaking, the types of purchases made using unsecured lines of credit are those which are short-term business needs, usually for small, frequent purchases such as inventory. Your line of credit is also very helpful when you have a cash flow gap that needs to be filled until incoming revenue remedies the situation. In some cases, unsecured lines of credit are also used to temporarily meet payroll demands until revenue can re-supply the shortfall.
Your source for unsecured lines of credit
Unsecured lines of credit can be obtained from Legacy Capital Lending, and your business will have the freedom and flexibility to compete in the marketplace. Contact us at your convenience to learn about how you can obtain unsecured lines of credit.