Using Business Lines of Credit

Business lines of credit have some great advantages. General business credit lines are the largest sources of credit that an institution, such as a bank, will grant to a client and after securing the line, it can be used for whatever business purpose the client sees fit. Also, with general business credit lines, you don’t have to keep applying for more loans. You use the money in the line of credit when you need it and you only pay interest on the amount you use. Never use the general business credit line and you don’t pay a dime of interest. Sounds great right? Well, it can be.

But what if you have bad credit? You may still find business loans for bad credit customer, but it’s going to take a little more work.


Any business owner knows when money comes in doesn’t always match up to when money goes out.  If you find yourself short on cash a general business credit line can be a great way to keep inventory stocked, pay for utilities or meet a payroll. It’s a great tool to draw upon in an emergency. But drawing on business line of credit in an emergency doesn’t mean you should wait until an emergency to apply for one. If you do, you may find yourself with few options and at the mercy of loan sharks and predatory lenders. Research laws and understand that loan sharks and traditional legitimate lenders are different. (If a lender ever offers an offer that seems too good to be true, then it probably is. Here are a few other warning signs to look out for to avoid loan sharks.

Lines of Credit vs. Business Credit Cards

Business lines of credit are great alternatives to business credit cards. Like credit cards you use the money when you need it. Otherwise, it sits there. But line of credit usually offer better terms than credit cards, especially secured lines of credit. In fact, that’s one of the main advantages of credit lines. If your bank offers you a line, but the terms aren’t much better than a credit card, keep looking.

Another important distinction is that lines may have more flexible repayment options. Credit cards usually require payments every month. Lines of credit can offer greater intervals between payments, a real convenience for business with  long cycles.

Credit cards do have some benefits, though. Cards offer rewards programs travel assistance and concierge service. If those things are important to you, think about what you are willing to pay for the added benefits.

Again, research pays when Do your research into what options you have and what works best for you between the two

Next Move

If you’ve had credit problems in the past or already have a considerable amount of debt, business loans for bad credit customers can be difficult. Remember to only tap into the line of  credit strategically. If you aren’t dangerously low on cash, don’t do it. If you must, take the least amount needed to accomplish tour goal.

Keyword: business loans for bad credit, general business credit