Woman paying with watch.

Business Lines of Credit

Understanding Business Lines of Credit

At Exchange Bank, we understand the critical importance of financial flexibility for small businesses, particularly during periods of growth or fluctuating cash flow. A business line of credit offers precisely that—accessible funds and adaptable repayment terms tailored to your business's needs.

What is a Business Line of Credit?

Unlike a traditional loan, where a lump sum is disbursed upfront, a line of credit provides ongoing access to funds up to a predetermined limit. You only pay interest on the amount you utilize, and as you repay the principal, those funds become available again—similar to how a credit card works.

Using a Business Line of Credit

Businesses commonly utilize lines of credit to address short-term financing needs such as operational expenses, inventory management, or financing growth initiatives. These funds offer flexibility and can be accessed through various channels, including business checking accounts, credit cards, or mobile banking apps.

Secured vs. Unsecured Lines of Credit

Typically offered as unsecured debt, a business line of credit does not require collateral. However, collateral may be necessary for higher credit limits or to mitigate other loan risks.

Rate Considerations and Additional Benefits

Lines of credit often feature lower interest rates than business credit cards, making them a cost-effective financing option. Furthermore, maintaining a positive credit history with timely repayments can enhance your business credit rating and improve future financing opportunities.
In today's dynamic business environment, managing cash flow effectively is paramount. A business line of credit from Exchange Bank offers the flexibility and financial stability your business needs to thrive. Whether addressing immediate needs or fueling long-term growth, our financing solutions empower you to achieve your goals. Contact us today to learn more and take the next step toward financial success for your business.