With a term loan, the borrower is required to pay it back, in full, within a fixed amount of time and typically with a fixed interest rate.So business owner who takes out a ,000 term loan gets the money in a lump sum, and then they make monthly payments from that point forward to pay it back.
As we all know, lack of working capital can kill a business.
At a minimum, it can cause a lot of stress when having to manage tight cash flow.
Unsecured Business Line of Credit Need continual access to capital?
It’s not for everyone, but perhaps an Unsecured Business Line of Credit maybe perfect for you.
If your unsecured business line of credit is for ,000, then you have access to that much total but you don't have to borrow all of it.
You might use ,000 to purchase new computer equipment for the office; that leaves you with ,000 in available credit.
You withdraw the amount you need, only paying interest or fees on the amount you actually use, and you pay it back according to specific terms.
In most cases, you can withdraw and pay back the cash on a rotational basis, using the line of credit to help fund ongoing business needs.
What's the difference between a secured and unsecured line of credit?
A secure line of credit involves collateral, which means if the business can't pay the loan back, the lender can seize the assets used for collateral.
When used correctly, it can serve as an excellent financial tool for businesses.