A secured line of credit is backed

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If you carry a balance you will be charged interest on that balance as set in the terms provided by your lender . As you make payments typically weekly or monthly and pay down your balance you will free up more “credit” that you can use in a revolving manner. How long you have to repay your LOC will depend on the terms you agree to. Some lenders require repayment in as little as three months while others may extend repayment for years. Likewise some lines of credit must be repaid annually. Unsecured business lines of credit vs. secured business lines of credit Business lines of credit come in two options: unsecured and secured. An unsecured line of credit isn’t backed by collateral e.g. business assets the lender can take if you default on payments . These are typically more difficult to qualify for and often carry a higher interest rate compared to a secured line of credit.  

It’s a great option if you don’t have any collateral to offer or don’t want to risk losing an Email Marketing List asset if you can’t repay the loan. Unsecured lines of credit tend to have higher interest rates since they involve more risk for lenders. However if you’ve been in business a long time and have an excellent credit score your interest rates will likely be lower than a business that’s been around for less time or that has a worse credit score.  by collateral — usually property or equipment — that the lender is entitled to take possession of if you’re unable to repay your loan.  



This translates into less risk for lenders and therefore lower interest rates compared to an unsecured line of credit. However if you can’t repay the loan you could lose the asset used as collateral. Business lines of credit requirements Applying for a business line of credit has a similar process to other financing options. The requirements differ depending on the lender but many require: A good credit score: Most lenders will require you to have a good business credit score to qualify for a business line of credit. This typically translates into a score of or higher depending on the credit scoring model used. Some lenders are willing to work with businesses with fair credit or no credit history. Financial statements: You’ll need to provide your financial statements such as income statements balance sheets and tax returns to prove the revenue your business generates. This is to ensure that your business can repay the amount you charge on your LOC.