Benefits of Revolving Credit for Business

revolving credit for business

Revolving credit is a type of credit that does not have a fixed number of payments. A customer pays a commitment fee and is then allowed to use the funds when needed. The amount can fluctuate each month.

Types of revolving credit for business

  • Business lines of credit
  • Business credit cards

When you get revolving credit for business you only pay interest on the money that you use. You get a pre-set spending limit and you can borrow up to the limit as needed. When using a credit card for business, as you pay back what you borrowed, your available credit goes back up.

Business credit cards are convenient for quick purchases. As a business owner you are often facing a number of risks, opportunities and challenges. One way to improve business growth may be through the use of a business credit card. While much can be said about the merits and disadvantages of using a credit card, the reality is that by managing it well and making sure that you repay it on time, your business can gain quite a lot.

Business lines of credit can be costlier than a credit card and you can borrow a much larger amount of money. So as soon as you’ve paid back the amount you owe, you then have the ability to re-use that money.

Revolving credit for business may be harder to qualify for than a business loan. If you’re not producing any revenues and your business hasn’t built up a good business credit score, then you may not qualify.

It’s important to make timely payments. The typical repayment term for revolving credit for business is 6 to 12 months.

Read your terms and conditions thoroughly and make sure you read the fine print.

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