A business line of credit can finance short-term expenses, like payroll or inventory. Both traditional and online lenders offer business lines of credit.
A business line of credit allows you to borrow up to a certain limit and only pay interest on the money you borrow — like the way a credit card works. You then repay the funds and can continue to draw on the line.
Unlike traditional small-business loans — where you receive a lump sum of capital and repay it over a specific period, with interest — a business line of credit is a more flexible form of financing. Business lines of credit can be used for a variety of short-term needs, such as managing cash flow, buying inventory, or covering payroll.
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