The Benefits of Unsecured Lines of Credit for your Business
Successfully handling cash flow is an integral part of small business management. Studies indicate that the vast majority of business failures are mainly attributed to inadequate handling of capital. Unsecured lines of credit preclude this risk by providing you with a source of funds to draw on whenever your finances need a boost. Here are some of the benefits of utilizing unsecured lines of credit for your company.
Obtain Cash Quickly
Unsecured lines of credit allow you quick access to extra funds for needs such as repairing equipment that breaks down, initiating a special marketing push, or making up the difference in your cash flow due to late-paying clients. Instead of having to go through a long drawn-out loan application process, you have a pool of finances to tap into whenever the need arises.
Unlike certain traditional loans that earmark borrowed cash for specific purposes, unsecured lines of credit allow you to use the funds wherever they are most needed. Additionally, repayment options are more flexible. Instead of fixed payments every month, you can make minimum payments when you are struggling and increase your payments when situations improve.
Boost Your Credit Score
Making timely payments and keeping balances low on your unsecured lines of credit help to raise your business credit score. This enables your company to qualify for other types of loans, receive better terms from suppliers, and more easily obtain capital from investors.
Keep Interest Rates Low
Consistently making payments on time on your unsecured lines of credit ensures that your interest rates remain low, usually far less than you would pay in interest on a credit card. You may also qualify for higher credit limits. Avoid the mistakes of underpaying or missing payments, which may cause your rates to rise and limit future access to funding.
For more advice on unsecured lines of credit and other aspects of small business finance, get in touch with Smart Capital Lending Group.