Unsecured Line Of Credit Provides Temporary Cash Flow

2007-03-08 10:33:40

( Financial )



Most banks and financial institutions offer revolving credit lines to individuals and businesses. These lines give you ready access to cash advances. Usually, there are three forms of open credit: overdraft protection line, home equity line of credit, and unsecured line of credit.

In the course of conducting business, you will experience temporary cash problems. Money can get stuck in unsold inventory or in accounts receivable. To avoid running out of cash, you should have an unsecured line of credit available any time.

It will be good to apply for an unsecured line of credit before you need it, so you will still be in a position of strength when you negotiate for the line. You should put your business in a position to qualify for unsecured line of credit. Like personal credit, you'll need to establish credit scores and a positive credit history for your business. It will be extremely difficult to get unsecured line of credit without an excellent credit history.

You can build your business credit history by obtaining secured debt from banks and unsecured debt or credit lines in other businesses. You should make sure that these firms will report your credit history to business credit rating firms or the small business financial exchange.

Once the lender has approved and established your unsecured line of credit, you will receive a set of checks. When you need the cash, all you need to do is write a check against your unsecured line of credit account. Depending on the amount outstanding, you will repay on a monthly basis usually over a period of two to five years.

Being a revolving credit line, your unsecured line of credit is very similar to an unsecured credit card, and just as easy to use. The difference is that you use checks to draw on the credit line.


All rights Reserved © Tradenet Services srl
Do not duplicate or redistribute in any form.