LOAN PROGRAMS

LINE OF CREDIT

 

A line of credit is a type of revolving loan that can be drawn upon at any time and up to the established credit limit.  Lines of credit help business owners to gain quick access to extra capital.   

A line of credit is different from a business loan primarily in the repayment schedule.  A business loan typically has month to month payments which begin as soon as the loan is acquired, whereas a line of credit only triggers payments to pay for the money that was borrowed.  If there is no money borrowed from the credit line, there is no payment.

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Interest Rate on a Line of Credit

Interest rates are different between a line of credit and a more traditional business loan. Business loans typically have a fixed interest rate, which remains the same during the term of the loan.  A line of credit, on the other hand, often has variable rate, which is tied to a specific rate such as the commercial bank prime or lending rate.

Lines of credit come in two types, secured or unsecured. A secured line of credit requires the borrower to place an asset as collateral to "secure" the credit. In contrast, an unsecured line of credit does not require the borrower to place any assets as collateral.  We only provide secured lines of credits.

With this type of line of credit, a business must pledge assets as collateral to secure the loan. If the borrower is unable to repay the loan, we will assume the ownership of any collateral and liquidate them to pay off the balance.

For more information on obtaining a Line of Credit or any questions regarding our business funding process, feel free to Contact Us.