Payday Loans

Avoid Payday Loans to Repair your Credit

by with No Comment Credit

If you are trying to make ends meet and are having past-due bills pile up, the last resort you would want is to take out a payday loan to pay your dues. There are many sources available today that offer payday advances. You can connect online with many payday advance loan companies to get a quick payday advance loan. Most payday loan companies do not check credit, so even if you have bad credit or no credit, you can still apply for a payday loan. The loans are issued after you show proof of banking account, Social Security, Driver’s License and Pay stub proofs. This information is used against you, often the lenders will deduct money from your accounts, including interest and principals that apply to each loan you take out.

If you are applying for a payday loan online…Beware…Some of the sources are not even institutes that specialize in payday loans. When you are trying to repair your credit, the last thing you need to do is spend money that is not necessary. When you borrow money from payday loaners, your personal information may not be private. Since many of the lenders are outside of the United States and are out of government regulations, your information just might fall into anyone’s hands. This puts your credit at great risk. You would be wise to perform some extensive research to ensure the payday loan institute is valid and trust worthy.

Payday loans offer you a loan against your paycheck, but the downside is you will be paying higher fees to get the loan. You could be wasting money and taking a chance on your identity. Some payday loan companies offer a “free” loan to their new customers i.e. no fees as long as the loan amount is paid in full on its due date. If you are searching for help to repair your credit, it might be wise to search the market for legitimate resources that will help you restore your credit at little or no cost to you. There are Debt Counselors and Debt Management Companies available that assist people with credit repair but the best source is you. You might be wise to check out government options available to people with bad credit.

Many services are available to help you repair your life. The best solution is keeping up to date on your bills if possible or minimizing your monthly installments by opting for credit cards that have no fees attached and low interest rates. If you have a credit card, or else applying for a credit card avoid charging items to your cards unless it is absolutely necessary. You might want to apply for a different credit card if you card has high interest rates and discontinue your old card once you receive your new card. In some cases, depending on your credit card history, you could call your credit card company and ask them to reduce your interest rate. If you have had a good history with the company, they will most likely oblige.

If you suspect that someone has access to your card be sure to contact your provider immediately to report the card lost or stolen. Always keep this information in close vicinity to ensure a quick response. Be sure to only provide your personal information to those you trust i.e. Social Security Number and Bank Account Number. Never give information pertaining to you freely especially over the phone. If you are considering a loan to payoff your debts, check the market first before applying. The more applications you complete, the more it applies against your credit report. You might want to cut back on your utilities, i.e. reduce your heat or air conditioning, to save funds that can be applied to your bills.

Are You Managing Credit And Debt

Are You Managing Credit And Debt Or Is It Managing You?

by with No Comment Credit

Credit is synonymous with American culture. It is actually a godsend, helping you buy your house or car, get an education, and take advantage of special offers and sales. Meanwhile, imprudent use of credit will only leave you cash-strapped. Understanding your legal defense and third-party actions is a start to fixing those issues.

Your credit report

So, one key to a stable financial future is your credit report. The report is used by employers, insurance companies, and potential creditors to get a glimpse of you. Finally, your credit report is so important that laws protect you from having incorrect information reported about you.

Request your credit report in the following way:

If your credit application is declined, you can obtain a copy of the report to verify that all information has been accurately reported. The name of the credit reporting agency that issued the report used to justify your denial in writing. You have a right to decide which one to choose. State law allows you to receive a free credit report from the agency, prepared for any given creditor, if the application is made within sixty days of denial. Just so you know, laws change and are different in every state, so pleasemake sure to do your research.

You also are entitled to a credit report at no cost once every calendar year, regardless of whether or not you were denied credit. Check to ask for a copy every year, so your report remains clean from bias.

Fixing Your Credit Report

If any of the information in your credit report is wrong, you can dispute it with a credit reporting agency. Within 30 business days after you alert a CRA of your credit dispute, the agency must investigate by asking the creditor to review its records unless it deems that something in your denial request is just not right. The credit bureau must correct any unconfirmed, incorrect, and error info.

Furthermore, you should know that bad credit information older than seven years may not be on your report. Start with the introductory rule. There are a few exceptions to this, and most of you are probably aware that bankruptcy may be reported for up to ten years.

If you disagree with the outcome of a credit bureau investigation about an error, you have the right to write a brief statement in your file explaining how or why it is wrong. If you enclose the credit showing the agency a small shielding statement, it will attach that assertion to your account whenever you submit it for application.

If you have credit problems:

Negative information that is accurately reported must stay on your credit file for a set amount of time, often seven years. This information includes late payments, bankruptcy, liens, and accounts given to a collection agency.

Having negative information in your files does not necessarily mean you will be refused open credit. Creditors look at your credit report differently.

Credit repair clinics promise to clean up or fix your credit record for a fee. Typically, these clinics cannot have accurate information removed or changed on your credit report. You can do it yourself, but a consumer reporting agency is not authorized to charge you for removing inaccurate information from your credit report or restoring lost points on an aging disputed account that caused actual harm.

How to Cancel Junk Mail — Credit Card Edition

You can remove your name and address from pre-screening by the credit reporting agencies — companies that allow businesses to look at a summary of their clerk reports to see if they will offer you a card. One example of this is pre-screening, as in the case where you get a credit card application from Capital One with “You’ve been Pre-Approved” written across the top. You can now “opt out” of having your credit report pre-screened by calling 1-888-5 OPT-OUT.

While it will be impossible to stem the tide of all your junk mail, this step will end many offers from companies that dink into credit communication layers.

Credit Repair Agency

A Credit Repair Agency – What Can It Do For You?

by with No Comment Credit

A credit repair agency advertises that it can help you repair bad credit so that you qualify for that loan if you need to buy a new car or vacation. However, you do have to be careful when engaging the services of one of these agencies because many of them will not provide you with any information. That is all you can hope for with a credit repair agency because you can only repair your bad credit.

If you contact a credit counseling agency, you will get valuable advice. However, it would help if you did not have to pay for this service. A wealth of information is available on the Internet to help you with your credit problems, and even workbooks that you can download for free. Instead of spending your hard-earned money on advice from a credit repair agency, there are many tips and techniques that you can get for free.

The primary advice for helping you repair your credit is to request a free copy of your credit report. Three major credit agencies have a file on you and your borrowing habits. By law, you are entitled to one free report a year, and everyone should review their credit report at least once a year to ensure there are no mistakes. When you contact a credit repair agency, you may get a free report, but you might also have to sign up and pay for credit counseling services.

If you are having a difficult time keeping your credit in check and find yourself in over your head, then you might benefit from the services of a credit counseling agency.

If you are contemplating bankruptcy, the people at these agencies can devise ways to help you prevent this. The counseling agencies have people trained in dealing with creditors and will negotiate with them to take a lower amount of payment. They can also help you negotiate a debt consolidation loan to pay off your outstanding accounts. Remember that this credit repair agency cannot wipe any items from your credit report.

You can take charge of doing your credit repair without having to resort to using a credit repair agency. If you are determined to bring up your credit scores, you can start by making a conscientious effort to make all your payments on time. A consolidation loan is the route you should take. If you are being remiss when sending in your payments and have no financial difficulty, you will just be wasting your money with a credit repair agency. Your credit rating will soon rise once you take charge of your finances.

Do you need a commercial credit repair agency? Probably not.

Improving Your Credit Reports

10 Tips To Improving Your Credit Reports

by with No Comment Credit

Credit is one of those things that — for the uninitiated, at least — far too many people don’t take very seriously until they need it. 

Here are ten things you can do to keep your credit in good shape so it is there when needed.

1. Pay your bills on time. A strong history of making your timely payments will do wonders for your credit profile, making you appealing to lenders. Often, a good payment history in your credit reports can lead to lower interest rates as well.

2. Pay your bill in full whenever you can. This will save you money on finance charges and even strengthen your credit scores if they are already in the top tier.

3. Do not use more than 50% of the credit line available on each card.

4. Lastly, if you see anything incorrect on your credit reports, dispute it in writing with the credit bureau right away. You can also contact the creditor to inform them that their information is inaccurate and request that they report it correctly with the credit bureau on each of your reports.

5. If you have recently completed bankruptcy, begin rebuilding with a secured credit card or one where it is no hidden fact that they are favorable to people like yourself. This usually comes at a higher interest cost, but after three months, your credit score will increase because you are paying.

6. If you have accounts listed as open but are closed, call the creditor AND send a letter to the credit bureau. Often, creditors never report an account as closed to the credit bureaus. …Or they’ll question why you have all of that available credit on the report in the first place and what your reason is for wanting to obtain it. If the lender believes you will increase your debt load substantially with all that credit, then a lot of seemingly valuable open accounts sitting at zero balances could make you look like someone who belongs in deep down the bowl loan world.

7. Keep your credit score high: Do not make many applications, as this will lower some points on your credit status due to multiple inquiries.

8. Limit your credit card usage to the essentials, and do not spend more than you can pay off within 6 months.

9. If your credit cards have extremely high credit limits that you will never use, balance them out by calling the creditor and asking to reduce my limit to something that makes sense for me. Not only will this help avoid the temptation to overspend, but it will also prevent potential lenders from looking at all that unused available credit and wondering if you are going on a debt spree.

10. The easiest means is to check the details reported by each of the three credit bureaus on a 6-month basis. Examples are TransUnion, Experian, and Equifax. You can get a free copy of your credit reports every 12 months at AnnualCreditReport. com

Bad Credit Personal Loans

Bad Credit Personal Loans – Applying For Cash Advance Online

by with No Comment Credit

This way, you may earn some quick money when you need it. Judocash advance, payday loan companies approve loans for everyone with any credit. As such, if you are just facing a sudden bill or have to pay for an urgent car repair, then loans like the one from ThickAFCredit can give you access to that cash in as little as one business day.

Here’s how cash advance loan companies work

For those of you who do not know, a cash advance or payday loan company provides personal loans to people in need with good and bad credit. Getting approved is simple. Whoah, you are going to have to qualify for a loan. However, payday lending companies have loose standards for approving loan applications.

In most cases, one must have a stable job and a minimum monthly income to qualify for consideration; this often comes with requirements around having a chequing or savings account in their name and post-entitlements. All applicants must be at least 18 years of age. His loan request is granted if he meets these requirements.

Also, no credit checks or collateral is necessary with a cash advance lender. For example, when you apply for a bank loan, these two factors affect the approval of your loan. When your request is accepted, the payday company will pay funds straight to a checking or personal savings account. The funds are generally available the following business day.

Why an Online Cash Advance Lender

Is The Way For Payday Cash Advance Application: You can walk into the shop to take out a loan or apply online. The former option is pretty standard, while the latter remains popular as it provides convenience and privacy. Also, getting a cash advance loan online is even more convenient if you compare different online payday lenders.

Every payday loan place is different. Therefore, companies have different fees, loan terms, and minimums you must meet. Before you avail yourself of a loan, it is always suggested to research different cash advance lenders and choose a lender that will soothe your needs. If you need an extended repayment period, apply with a lender that offers 30-day cash advance loans.

When comparing cash advance lenders online, look at fees, interest rates, and late charges. Interest rates are $15–$30 for every hundred dollars borrowed. If you do not pay the entire balance by this due date, your lender will charge interest on that portion. Repay the money ASAP to prevent further damage.

creditcard

4 Reasons Why Your Business Needs to Accept Credit Cards

by with No Comment Credit

As a business owner, you have many responsibilities; making sure you have a great product to offer your customers, ensuring you have the right staff, abiding by rules and laws, marketing your business to new clientele, paying bills, and so on.

Why add one more thing to your never-ending list of things to do when it comes to accepting credit cards? The benefits of accepting credit cards far outweigh the cons.

Below are the top four reasons why your business needs to accept credit cards right now.

  1. Increase revenue 

In a business, increasing revenue is critical to success and keeping your doors open. Perhaps the most important benefit of accepting credit cards is that it can help increase your revenue.

  • When using credit cards, consumers spend 12 to 18 percent more than when using cash for purchases
  • According to a survey conducted by Intuit, 83 percent of small businesses that accepted credit cards saw increased sales. Of those surveyed, 52 percent made at least $1,000 more a month and 18 percent made at least $20,000 more a month!
  • Consumers are more inclined to make impulse purchases when paying with credit cards, including both frequency of purchases and the dollar amount of those purchases

By accepting credit cards, you are easily creating the possibility of increasing your bottom line, which is something every business strives for.

  1. Make your customers happy 

What would your business be without your loyal customers? Don’t you want to make their experience with your business the best it can be?

According to Visa, credit cards are now seen as the most efficient payment method, surpassing paper checks and cash for the first time ever.

Accepting credit cards is becoming the new norm. If your customers want to pay with a credit card, but your business doesn’t accept them, they are more likely to take their business elsewhere.

  1. Attract new customers 

Business owners often find attracting new customers a huge obstacle. However, you can attract new customers by hardly lifting a finger if your business accepts credit cards.

  • Consumers are more likely to shop at your business if they know you accept credit cards
  • Fifty one percent of American adults under the age of thirty hate paying with cash, no matter the amount. The trend is continuing through different age brackets
  • Word of mouth advertising is huge! About 84 percent of consumers take recommendations from people they know, while 68 percent of consumers are influenced by opinions posted online

When you accept credit cards, you make your customer’s lives easier, and enhance their shopping experience. Therefore, your customers are more likely to promote your business and their positive experience to new customers!

  1. Boost local economy 

When consumers pay with credit cards at your business, you are helping your local economy grow and thrive.

  • In 2016, 112 million consumers shopped and dined small on Small Busines Saturday, more than ever before. This is a 13 percent increase from 2015
  • When consumers shop at small businesses, more money goes back into the community. About 48 percent of purchases at local independent businesses go right back into the community, compared to less than 14 percent of sales made at chain stores.

This all comes full circle. By accepting credit cards, your business will increase its revenue, and your customers are more likely to spend more. Your customers will be happy with their experience and spread the word about your business, so you can attract new customers. As your revenue and customer base grows, you will help your local economy, and increase your revenue!

Source: startupnation.com

creditreport

Business Credit Vs. Personal Credit Reports: Why You Need Both

by Credit

Personal credit is something you should be familiar with as a business owner. Having good credit, or being “creditworthy,” makes getting financing easier when you need it. But do you know what your business credit report is and how it works?

Business credit is like personal credit in many ways. But they are not exactly the same. They are made up of different data and have different uses.

Here are a few details included in business credit reports:

  • Ownership information.
  • Subsidiaries.
  • Financial information.
  • Risk scores.
  • Liens or bankruptcies.

The credit report procedure begins when a company obtains a federal tax identification number. Unlike consumer credit reports, business credit reports are available to the public.

Business credit represents a company’s creditworthiness. And it can help with financing, acquiring a business credit card, and even doing business with suppliers. Here are some of their distinct differences you should keep in mind.

Identity numbers

Your Social Security Number relates to your personal credit history. But the IRS assigns an Employer Identification Number to your business. This distinguishes your company’s identity from you as its owner. Your EIN is associated with your business credit history. Because states are in charge of business registration, companies registered in different states can use the same name. To avoid confusion, the IRS gives EINs that identify U.S. firms. Businesses use their EIN to file taxes, get loans, and get licenses. It is made up of a nine-digit number, like the Social Security number, with the format: XX-XXXXXXX. While sole proprietorships don’t need an EIN for tax purposes, they can still get one to establish business credit. SSNs (and ITINs) can be used for business purposes if you own a business that isn’t required to pay taxes separately from its owner.

Factors affecting credit scores

Payment patterns, credit card usage, loan usage, and other types of credit can impact personal credit reports and scores. Business credit history considers the same financial information as personal credit history. It also includes additional factors such as:

  • Vendor credit history.
  • Historical data.
  • Business size and payment performance.

What determines credit scores? The FICO personal credit score has five major components:

Payment History (35%)

Your payment history to lenders is the most crucial component in a FICO score. The first thing lenders look at is your ability to pay on time.

Amounts owed (30%)

The whole point of working hard to improve your credit score is to borrow money when you need it. You don’t have to be a high-risk borrower because you owe money. But maxing out your credit cards will harm your FICO score.

Credit history length (15%)

It takes time to get a strong credit score. In general, the longer a person’s credit history, the higher their FICO credit score.

Credit mix (10%)

There are several types of debt, such as retail cards, credit cards, car loans, etc. FICO cannot establish your credit score unless you have some credit. So, to start (and improve!) your credit score, you must use credit cards and installment loans responsibly.

New credit (10%)

According to FICO, opening many new credit accounts in a short period raises your credit risk. Personal credit scores range from 300 to 850 evaluated by FICO or VantageScore. And business credit ratings are expressed in many ways, depending on the credit reporting institution and index used. An Employer Identification Number (EIN) allows the IRS and credit reporting bureaus to track businesses. If your small business has an EIN, the first step to establishing your score is to register with the following;

Equifax

Equifax scores your small business credit in a range of 101 to 992 on the Small Business Credit Risk Score for Financial Services. And a range of 101 to 816 on the Small Business Credit Risk Score for Suppliers. They determine credit scores based on: Payment history. The ratio of available credit. Age and size. Demographics. Public records.

Experian

Experian’s corporate credit score considers the same elements as Equifax. Experian collects information from lenders and vendors who have extended a credit line or loaned money to your company. They compare it to peers in your sector.

Dun & Bradstreet

The PAYDEX report ranks your business credit based on your company’s:

  • one-year payment.
  • history.
  • financial stress scores.
  • other data from at least four vendors.

Equifax, Experian, and D&B all generate business credit ratings besides credit reports, with scores ranging from 0 to 100.

Meanwhile, the FICO Small Business Scoring Service (SBSS) examines small business credit and runs from 0 to 300. The higher the number, the more creditworthy the company.

Bottom line

As a business owner, you need to create a distinct credit profile for your company. Lenders will rely on your private credit profile to determine credit risk if you don’t have a business credit profile. This might limit your ability to borrow for your business. Establishing business credit and distinguishing it from your personal credit are crucial steps for the growth of your business. It not only allows more opportunities for your business, but it also provides security for your personal assets, separate from your business.

Business credit might be more difficult to get than personal credit. It’s vital to understand the differences early on to ensure your company’s long-term viability.

Source: startupnation.com

businesscredit

Simple Ways to Establish Business Credit

by Credit

It’s practical to learn how to establish credit for your business. However, before you start applying for loans, weigh the costs as well as the impact on your business. Once you are approved for a loan, there is no turning back.

Planning is crucial when it comes to operating with loans. You should consider how it will benefit your business and how you will make payments. Keep reading for a breakdown of business credit: its purpose, how to get it and the benefits to your business.

So what is business credit?

Similar to personal credit, business credit refers to the credit you can get to fund purchases. In a business, this might include financing and loans for inventory, equipment, or supplies. When you establish a good credit rating in your business, it will be easier for you to borrow money when your business needs it.

Poor credit scores may limit your ability to secure contracts. You could face higher loan interest rates, limiting your company’s growth opportunities. But a solid business credit file can put your potential clients, lenders, and suppliers at ease.

What is the purpose of business credit?

The credit of your company can impact many areas of your business, including:

  • Your loan eligibility or interest rates.
  • Insurance premiums.
  • Vendors and suppliers’ net conditions and credit limits.
  • Your ability to raise money with potential investors.
  • Your eligibility to contract with other organizations.

Benefits of business credit

You will build your business credit over time. Your credit rating takes into account a variety of elements and is expressed in the form of credit scores for businesses.

Your business credit report is created when your accounts and payment activities are reported to business credit agencies. As a business owner, your personal credit file might also be taken into account.

Your company will benefit from a strong credit history in a number of ways:

  • When borrowing money, you might be approved for larger loan amounts and lower interest rates.
  • Business insurance may be less expensive.
  • Suppliers might be open to offering your company better deals.

Ways to establish business credit

It doesn’t have to be difficult to establish good business credit, but it does take some planning and forethought. The sooner you start establishing your credit, the better. Here are a few tips to get the most out of your credit-building efforts.

  1. Set up a separate entity for your business.

Separate your personal and business expenses by creating credit cards, lines of credit, and bank accounts under your company’s legal name. This will simplify your bookkeeping and taxes. A separate business account will also help you establish a history with your bank. You’ll come to them as an existing customer if and when you seek credit.

  1. Register your business.

Lenders and potential business partners will need this information in order to examine your company’s credit history. Have your registration documents handy before applying for a loan.

  1. Request an employer identification number.

You’ll need this unique identifier for your company for the purposes of tax reporting. This data is also crucial if you want to convert your company into a corporation or if you want to open a bank account in your company’s name.

  1. Pay on time, every time.

By paying your bills on time, you demonstrate that you are trustworthy and capable of efficiently managing and repaying your debts. Late payments, even if only a day late, will have a negative impact on your business credit rating. Have a structure in place to make your payments on time every month. Prepay, or pay early, whenever possible.

  1. Monitor your credit.

Mistakes happen. Keep clear records and check your business credit reports on a regular basis so you can catch errors early. If you see something that doesn’t match, register a complaint with the reporting agency.

The bottom line

Just like your personal credit score, it’s important to build and maintain healthy business credit. By making good choices, you can develop a credit rating that will allow you to get the funding you need to grow your business to the next level.

Start early and keep consistent in your credit-building efforts so you keep your financing options open.

Source: startupnation.com

creditbuild

Why You Should Stop Making Excuses and Start Building Your Business Credit

by Credit

Your business credit score is a measure of its likelihood to honor its financial obligations. As such, this seemingly innocuous figure will significantly affect your ability to access credit – as well as the interest rates you pay.

It therefore makes good sense to build this score as rapidly as you can, but companies frequently make excuses and find more important things to focus on. This can be significantly damaging to their longer-term prospects.

Excuse 1: Business credit scores don’t matter that much

Really? Banks, landlords and suppliers wouldn’t agree with this. In fact, they’ll use your credit rating to decide whether or not to do business with you, and on what terms.

So, if you’re willing to pay inflated interest rates, pay upfront for your stock and rent second-rate premises, keep on convincing yourself that your credit score counts for very little.

Excuse 2: I don’t need to borrow, so what does it matter?

While most businesses need to borrow in order to start up, many are self-funded. However, even if you don’t need a loan today, doesn’t mean you won’t require an injection of capital tomorrow.

You should also bear in mind that even the best funded and most profitable businesses can hit a sudden cash flow crisis, and without a solid credit score, you could struggle to get the money you need to dig yourself out of trouble.

Excuse 3: Startups can’t build a credit score anyway

It is true that banks generally won’t lend to new businesses, preventing them from building their credit score in this way. However, suppliers and vendors are often prepared to offer short-term financing in the form of trade credit, which allows you to pay for orders 30 or 60 days in arrears (post invoice) rather than via cash on delivery or a pro forma invoice.

Make sure you pay on time and in full and your credit score will start to build, enabling you to negotiate even better terms of trade (and obtain a bank loan if you need one).

Excuse 4: I can’t build a business credit score because of my poor personal credit

There is some degree of truth in this: if you have personal credit problems and no business credit score, you could struggle at first. However, when banks won’t lend, alternative lenders often will, applying quite different acceptance criteria, so you can still borrow and still build your business credit score.

Excuse 5: I don’t need a business credit score – look at my great personal credit!

The flip side of excuse four, this argument suggests that a good personal credit score obviates the need for a business score. However, research conducted by the Small Business Administration suggests that a creditworthy company can obtain between 10 and 100 times as much credit as an individual.

Also, bear in mind that mixing your personal and corporate finances can cause terrible problems for you if the business hits trouble.

Excuse 6: I simply don’t have the time

This excuse brings us back to where we started: you should never consider yourself too busy to build your credit score.

Make sure your suppliers report your positive transactions to the credit bureau so that your score continues to build and build, and make certain you adhere to agreed terms of credit and repay any borrowing on time and in full. Your business could depend on it.

Source: startupnation.com

business-loc

Why Every Entrepreneur Should Open a Business Line of Credit

by Credit

Cash flow is one of the top concerns for small business owners and entrepreneurs, according to a recent report on the state of small business. That’s because having consistent cash flow is a necessity for success in any field. Unfortunately, the ebbs and flows of business, slow paying clients, operating expenses and other factors can create the occasional cash squeeze. This is where a business line of credit enters the picture.

Here’s why every entrepreneur should open a business line of credit:

1. A business line of credit is flexible “revolving” capital

A business line of credit functions like a business credit card, except that you can access cash. This makes use of funds that are much more flexible, as you can utilize the money for basically any business need, from buying inventory to reducing other debts to paying employees.

A business line of credit differs from other loan products in that it’s considered to be revolving capital. You don’t get a lump sum of cash upfront, like you do with term loans. Instead, you’re free to access the money as you need. Your credit limit replenishes as you repay what you borrowed.

For example, if you’re approved for a line of credit of $50,000, and you withdraw $10,000, your remaining available credit will be $40,000. Once you repay that money, your available credit will be back up to $50,000. In this sense, as long as you consistently make payments, you’ll have access to a supply of money. That comes in handy when the unexpected occurs.

2. A business line of credit can be much more affordable than other financing products

A business line of credit usually has competitive rates and terms, with average interest rates spanning from 7 percent to 25 percent. This means it’s often a more affordable form of funding than invoice financing, equipment financing, a business credit card and even short-term loans.

Of course, the exact rates and terms you get depend on your credit, revenue, time in business and other factors. Obviously, if you have an established business with consistent revenue, the more likely you are to get a high credit maximum at attractive rates and terms. Be sure to compare with other options before agreeing to an offer.

Additionally, you only pay interest on what you withdraw. So, when business picks up and you don’t need to tap into your credit line, you won’t be charged interest.

3. A business line of credit keeps you in control

Few financing options offer you control like a business line of credit does. Not only do you get to use the funds as you need and see fit, you also don’t have to meet the demands of lenders and investors.

For example, it’s alarming that many entrepreneurs that build successful companies actually aren’t in a leadership position when the business goes public. According to research from Noam Wasserman, a business professor and expert on entrepreneurialism, for startups in the late 1990s and early 2000s, only 50 percent of founders remained the CEO after three years into the venture. This is mainly because investors insisted they relinquish control.

So, while going to investors for capital can lead the business to great success, it can also lead to conflicts with managing your company. Conversely, a business line of credit gives you funding — without having to answer to others. This way, you can build your business in the way you’ve dreamed.

4. A business line of credit has a relatively easy approval process

A line of credit is a solid and accessible financing product for young businesses as well as established ones. Generally speaking, you only need to be in business for at least six months and have at least $50,000 in annual revenue. Keep in mind, of course these terms depend on the strength of your business.

Also, it’s possible to get an unsecured line of credit, which is backed by a personal guarantee instead of collateral or a deposit. This takes a lot of risk out of borrowing for you, personally. However, you should note that unsecured lines of credit may come with a higher interest rate and/or stricter qualifications.

If rates are much better on a secured line of credit, opt for that instead. You can back lines of credit with equipment, invoices and other business assets to get approval and lower rates.

5. A business line of credit works well with other financing options

Different loans work well for different things. As Marco Carbajo, a business credit expert, notes, a business line of credit “provides companies the flexibility needed to meet their short-term funding needs. When the need for cash is there, funds are there.”

Since a business line of credit keeps you secure in the short term, it works well with financing products geared for the long term.

For example, a term loan from the SBA can provide a lump sum of cash to use for business expansion over the next five years or longer. During that time, a line of credit can serve as a supplement when daily cash needs arise.

With a smart loan combination, you can ensure a lack of capital never holds your business back. This allows you to focus on what matters: funding a successful, sustainable company.

Take control with a business line of credit

No loan option is perfect. But there are reasons why a business line of credit is one of the sought-after financing products for businesses. It’s flexible, affordable, accessible for most, and gives borrowers more control.

As long as you do your due diligence and compare options, you can benefit from opening a line of credit. Considering combining with other financing products if needed. You’ll meet all your funding requirements — and you’ll be able to get going on building your business.

Source: startupnation.com