How Does a Business Line of Credit Work?
A business line of credit is much like a credit card, as it provides your business with a set amount of money that you can access when needed. You have the flexibility to withdraw funds from this line of credit whenever necessary, and you only pay interest on the amount you use rather than the entire available sum. Depending on the terms of your agreement with the lender, your business line of credit may have an expiration date or revolve. If it revolves, you can reuse the funds once youâve repaid them without having to go through the application process again. A business line of credit can be beneficial for small businesses, particularly for addressing short-term cash needs.
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