The Basics of Unsecured Business Lines of Credit

One of the biggest challenges of running a business is managing cash flow. At times, you may find that you’re short on cash but still need to continue operating and paying your bills. When this happens, some businesses turn to unsecured business lines of credit.

What are Unsecured Business Lines of Credit?

An unsecured line of credit is a form of financing that allows business owners to access a certain amount of funds whenever they need them, without the need for collateral. Collateral is an asset or property that a business owner (the borrower) pledges to guarantee the payment of the line of credit. If the business owner fails to repay the line of credit, the financial institution/lender can seize the collateral.

In this case, business owners who are pre-approved for unsecured business lines of credit are not required to submit collateral. This type of line of credit typically has higher interest rates than secured lines of credit, but they offer more flexibility and convenience to business owners.

What are the benefits of Unsecured Lines of Credit?

Aside from having no collateral required, here are some great benefits of unsecured lines of credit:

• Flexibility: Business owners have the flexibility to access funds as they need them, up to a predetermined limit, without going through the lengthy application process required for other types of loans.
• Build credit: When business owners make timely payments, this can help their businesses build credit, which can help them secure higher loans or credit limits in the future.
• Access to funds: Having access to unsecured business lines of credit allows business owners to use it for different business expenses like purchasing inventory, hiring employees, or even expanding their business operations.

Overall, lines of credit are a great financing option for businesses that need flexibility and quick access to funds. Clark County Credit Union offers business loan products such as business lines of credit that offers business-friendly interest rates. For more information about our commercial loan products, call us at 702-228-2228 or visit www.CCCULV.org.