Business Line of Credit
Businesses, just like consumers, have the ability to apply for and use credit. In fact, most businesses have some form of a business line of credit, whether that be a long-term loan or a business credit card. In this article, we’ll go over what you need to know about business credit, and how it can help you grow your business!
What is Business Credit?
Business credit is very similar to personal credit – it’s still a loan that is secured using your business’s financials, rather than your personal credit. A business line-of-credit can be the lifeblood of your business, available to pay expenses such as supplies, payroll, and business expenses. These loans help businesses find valuable cash flow resources to float business expenses.
How Can a Business Line-of-Credit Help My Business?
It’s no secret that businesses (especially those that are just getting started) require large, ongoing cash commitments to operate, let alone grow. Depending on your business, you may have terms associated with invoices you send your clients (30-90 days). While you are waiting for those checks to come in, your vendors, property owner, and employees all expect to be paid. A business line-of-credit gives access to the cash you need to run your business, as well as when the time comes to expand, for example, hiring new employees or replacing important equipment.
What are my Business Credit Options?
When it comes to credit options, there are three main categories – business credit cards, business loans, and business lines of credit. Business credit cards and lines-of-credit are shorter-term borrowing options, which revolve monthly and typically come with higher interest rates. If you’re looking for a longer-term borrowing solution, a business term loan is likely what you need. Business term loans usually come with lower interest rates, and longer terms, making it easier to finance large purchases over a longer period of time.
Which Option is the Best For me and my Business?
The right business credit solution really depends on your individual business needs. Chances are if you’re just looking for a way to pay/borrow for smaller expenses, such as inventory or monthly rent, a business credit card or line-of-credit is probably a good option. If you’re looking to expand your existing operations with additional employees, space, and computers, a business loan is likely the better option for you. The lower interest rates and longer term will give you the flexibility your business needs.
KEMBA loves working with Businesses
At KEMBA, we recognize the importance of businesses in our community, which is why we offer a full range of business banking solutions. If you are a business owner looking for a business line of credit, contact our dedicated local associates to see how KEMBA can help your business grow. Call 614.235.2395 and select Option 2 for more information.