So what is a Business Line of Credit (LOC)?
Sure you can get a cash advance from your credit card but, you will pay fees for the advance and pay interest on that amount that had been advanced. If you do not pay off that credit card at the end of the month then you will incur finance charges of the balance which adds more for you to pay back. Every month that you let that card have a balance you will pay up to 30% interest on the balance.
I know you are thinking that you have to pay interest on the LOC also, which is True. Over all, the interest will be more on the credit card because of the monthly recalculating of interest on the remaining balance. The LOC charges you a much reduced interest rate for the amount borrowed.
Business Line of Credit is a Revolving Account!
Once you pay back the amount borrowed, let’s say $10,000, you will once again have the intital $50,000 to borrow from.
This is how it is like a credit card. You borrow, pay back the amount with interest and then you can use it again and again. As long as you keep your Line of credit in good standing you should never have a capital problem in your business.