Business Credit: Which LOCs Have the Most Benefits?

October 18, 2018 by CNH Finance, LP in category “Financing”

Business credit provides companies with a source of capital, usually without the restrictions of traditional loans. Yet even within the realm of business credit, there are different types, each with their own configurations.

Unsecured Business Credit

Unsecured lines of credit are held up as the goal for businesses. Having an unsecured line of credit meant no collateral has to be put up against the financing. These days, unsecured lines of credit are even offered to new businesses. However, not requiring collateral is really the only major positive point about unsecured lines of credit. Because collateral isn’t required, the interest rates on unsecured lines of credit are very high. Even those with “special introductory rates” of zero percent only last for a little while before they go through the roof. Unsecured lines of credit have fallen out of favor with savvy business owners.

Secured Business Credit

As one might expect, secured lines of credit require some form of collateral. The amount of financing available is often very limited. Secured lines of business credit are often used by businesses with low FICO scores and can be used to build up credit ratings. But depending on the existing credit scores, a business may be paying high interest rates.

A Better Business Credit Solution

In today’s business landscape, foregoing lines of credit is like limiting the air you breathe. Having a reliable line of credit gives businesses the capital they need to meet regular and unexpected expenses, and to grow successfully. Asset based business credit provides flexibility without placing a strain on finances. Asset based business credit is structured around the inherent value of vehicles, receivables, inventory, and other items owned by a business. Asset based lines of credit are revolving, meaning that as a business repays the balance, the amount of financing available is replenished. What’s more, the amount of financing actually grows with businesses. Something as simple as acquiring a new piece of equipment or experiencing an increase in sales can easily raise the limit available to businesses.

Learn More Today

CNH Finance specializes in asset based business lines of credit. Our lines of credit can be used by businesses across all industries and for any purpose. Contact our offices today and get a financing solution tailored to your business needs.

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