A business line of credit provides more flexibility than a regular business loan. Business owners can borrow as needed up to their limit, which can range from $5,000 to $3 million.
Revolving business lines of credit give you an ongoing pool of money to dip into, and you only pay interest on the amount withdrawn. Additionally, this means that once you pay down your balance—plus any interest—you can access the funds again.
Lines of credit are best used for short term operational expenses such as supplies or inventory especially in times of growth when cash flow varies. An additional benefit of using a line of credit is that by keeping it in good standing you may be able to build your business credit rating.
Advantages of Lines of Credit