Business lines of credit are popularly presented in two forms; the secured and unsecured lines of credit. Unsecured lines of credit stand out and are most preferred by a majority of small business owners. Small businesses don’t require collateral to qualify for unsecured lines of credit. However, they have to endure higher interest rates and shorter payment terms.
But what sets unsecured lines of credit from other business lines of credit? Let’s find out below.
- You Need No Collateral
Different from secured lines of credit, an unsecured one needs no collateral to be financed. Your business and personal assets are safe and can’t be confiscated if you fail to pay the loan. However, you still need to stick to the lender’s terms and pay the loan in time to keep a good credit score.
The debtor can still use debtors to collect repayment, and if you default, you can still earn a negative credit score.
- It’s a Flexible Financing Option
The conventional bank loans will issue money for a given purpose and ask you to pay it back in planned installments. However, that is not usually the case with unsecured lines of credit. A line of credit will be there for you to borrow anytime you need it, and you can use it for any reason.
If you carry a credit balance, you will have to make minimum monthly payments even though you don’t need to set a repayment schedule with a line of credit.
- Faster Processing Time
The first quality of an outstanding loan is the fast processing time. That is one of the admirable qualities of unsecured lines of credit. They are much faster to process than conventional bank loans, which can take anything between weeks and months.
Additionally, if your credit score and financial history are strong enough, you can have your unsecured line of credit processed within 24 hours.
Have You Considered Unsecured Lines of Credit?
One of the easiest ways you can secure a less-restrictive loan for your growing business is through unsecured lines of credit. But you also need a reputable financial organization to process such a loan for you.
Contact Alternative Capital Source today and secure your first business line of credit for your growing business.