Business line of Credit, Business Credit Cards and Business Loans: Which one is right for your Small Business?
It seems like there are endless options for owners to choose from when trying to decide how to fund their business. Here are a few of the main options available to you to help you determine which is your best option.
Depending on where you get the loan and the loan terms, the interest rates and APR for your business loan will vary. Luckily, there are more loan options than ever before available today, which include SBA loans, online business loans, and traditional loans from the bank.
You will be able to negotiate the terms of your business loan; for instance, it would be best to negotiate for a shorter-term loan for inventory that has an expiration date, rather than fund that inventory with a loan that spans over many years.
Business Credit Cards
Young businesses should apply for a business credit card in order to start building their credit right from the start. Also, credit cards are a great way to access funds and are much easier to obtain than a loan.
However, keep in mind that getting approval for a business credit card is closely tied to your personal credit score. It is also important to note that most loans have lower interest rates than credit cards.
Business Line of Credit
A business line of credit allows owners easy access to funds when they need it, then they can just pay it off and use the line again. It is often a popular choice among smaller businesses that sometimes need access to quick funds.
This type of financing is also more flexible than other forms since it deposits funds directly into your business account. For instance, some credit cards have limitations of what they can be used on, while cash from a business line of credit places no limitations.
Do you still have questions about what form of financing is best for your small business? Contact Dream Financial Lending Solutions today!