If you have a business, then you will need loans to grow and managing these loans is one of the main parts of running a successful business. A small business owner may need credit at any time, whether to take advantage of a new growth opportunity or to exit the business from a financial crisis, but it is important that the owner clearly understands the differences between the different types of loans typically offered for small businesses.
Today, we will discuss the main differences between a business line of credit and a credit card for businesses, so that you can determine for yourself what is best for your business. business now and in the future.
Secure Vs Unsecured Loans
Credit cards are usually unsecured loans, while a business line of credit can be both guaranteed and unsecured, depending on the particular situation.
A corporate line of credit almost always has a higher limit than unsecured general credit cards.
Credit cards are infamous for their high interest rates on the balance, while those who offer corporate lines of credit charge relatively lower interest rates.
Withdrawal of money
It's one thing to use them directly, but if you use credit cards to withdraw money, the bank will charge you even higher interest rates than you would. 39; habit! On the other hand, the withdrawal of cash is actively facilitated when you have a business credit with which to work.
However, the most important benefit that business lines of credit have on credit cards in terms of cash advances is the fact that they will allow you to withdraw the total amount (100% of the business credit awarded) in cash if you need to. On the other hand, credit cards will not even give half of the credit allocated in cash. This is exactly the reason why businessmen always prefer credit to business rather than to professional credit cards.