What Are the Pros and Cons of Business Lines of Credit?

Pros:

• Gives you greater flexibility
• You only pay interest on the amount of credit that you use
• Cultivates a good relationship with a lender
• Can help with your business credit rating
• Attracts lower interest rates
• Offers the possibility of lower fees

Cons:

• Could have a complicated application process
• May require comprehensive financial statements and revenue reports
• May require a personal guarantee or a guarantor
• Must be carefully managed to ensure the ability to pay
• Interest could compound following any missed payments

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