Business Finance Solutions

Andrew J. Logan asked:

If you own a small business you undoubtedly already know that you need a line of credit to operate. But, what kind? What are your options as far as terms and conditions go? These are the questions that this article will attempt to answer.

Your options really consist of straight loans from a bank, personal loans, and credit card loans, because credit card loans are the most accessible to new businesses, this is the type I will focus on.

There are two types of credit cards, or rather terms that you may want to look at; secured small business credit cards and unsecured. The former is the most attractive because it allows new small businesses to establish credit, even if they have no prior credit history.

Secured business credit cards offer the cardholder the option of putting up company and/or personal assets as collateral for the line of credit in which they are applying. This can allow you to leverage you business and personal assets in order to gain more working capital, and establish a business credit record.

There is a positive and a negative side to this type of loan, so I will give you the good news first. With no credit record, you can leverage you business assets including your business car, furniture, building, warehouse, land and other physical assets in exchange for a opportunity to prove your trustworthiness to the lending firm, which can be a good way of getting your foot in the door.

Now let me give you the bad news, after all, most people only here what they want to hear, but I ask you to consider both sides and talk to your lawyer before jumping in. Here is what you have to lose; potentially everything. That is kind of harsh, but it is true. If you sign all of your personal and business assets over as collateral and then default on the loan.

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