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Many small business owners find that a single small business credit card is great for daily business. But they often need more. Consequently, it's not on common to find small businesses that invest in a variety of credit strategies to meet their growing needs.
If you're a small business owner looking for a small business credit card-or even a business owner who already has a small business credit card but is looking to expand your options-ask your creditor or financial institution about small business loans and small business lines of credit. A small business credit card is perfect for daily or even monthly business expenditures. But not all business debt can be paid off at the end of the month. It might be in your best interest (and that of you debt!) to opt for an alternative type of small business credit management.
Small Business Loans
Small business loans are a great option for planned business expenses that supersede monthly cash flow. Does your business need to move into a new office? Do you own your office space but need to upgrade facilities? How about office supplies or out-of-date computer technology? All these genuine business necessities are indispensable for a growing business. But they can get pricey.
These types of small business needs often stress small business credit card accounts. But small business expenses between $20,000 and $50,000 are perfect for small business loans. Prime interest rates for small business loans are currently 8.25%, which means you can get a better deal on long-term credit through a small business loan than you could through a normal small business credit card.
Small Business Lines of Credit
Small business lines of credit work like a credit card. Your creditor or lending institution will provide you with a line of credit that is open for a specified amount of time. Depending on your credit rating, the amount of time you've been in business, and your assets, most small business lines of credit can provide their owners with anywhere from $5,000 to $50,000. Because a small business line of credit operates under many of the same principles as a small business credit card, learn how to manage your small business line of credit with our small business credit card tips.
Secured lines of credit require some form of personal or business collateral. Unsecured lines of credit do not require collateral, but they generally have higher interest rates. You can use your small business line of credit for planned or unplanned business expenses, to pay off A/P invoices, to make necessary office or equipment upgrades, to stock up on inventory, or simply to stabilize cash flow.
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