What Is a Business Line of Credit? Everything You Need to Know
What Is a Business Line of Credit? Everything You Need to Know Running a business isn’t always smooth sailing. Sometimes, you need a financial cushion to weather unexpected storms or seize golden opportunities. This is where a business line of credit steps in—a flexible financing solution that works like a trusty safety net for businesses of all sizes. Understanding the Basics Definition and Purpose A business line of credit is a revolving credit account designed specifically for businesses. Think of it as a financial tool that allows you to borrow money up to a certain limit, repay it, and borrow again when needed—kind of like a credit card but for business purposes. How It Differs From Traditional Loans Unlike a standard loan, where you receive a lump sum and pay it back in installments, a line of credit gives you ongoing access to funds. You only pay interest on the amount you use, mak...