A business line of credit, also known as an operating loan, is an important form of financing a business, especially small businesses. It provides the business with money to meet its daily expenses. The credit line is reduced as you use the funds. When you make payments towards the operating loan, your credit line is replenished. Often the bank may require a security as collateral for the business line of credit. You can also get an unsecured business line of credit but credit line may be lesser than a secured business line of credit. The collateral could be the business assets, inventory, assets or other property. The interest is calculated generally on a daily basis on the outstanding amount.
You cannot use funds beyond your established credit line. There are many banks and finance companies that can help you get a business line of credit in Canada. Once you obtain a business line of credit, you will continue to have access to the funds up to your established credit line as long as your account is in good standing. Generally the unused portions of the funds do not attract any fee. So you pay fees only for the amount you have used.
Toronto Mortgages, servicing the GTA, is your point of contact when looking for a business line of credit. We will get you started on a path with the most competitive rates within the GTA and make sure you are happy with our service. A business line of credit offer better benefits for a small business owner than a personal loan. A business line of credit once established will generally continue as long as the business operates or the account is in good standing. A personal loan on the other hand is of limited tenure. Once the tenure is over, you will have to re-apply. Also in case of a personal loan, you will receive the entire amount in one go and you will have to pay interest on the entire amount whether you use it or not. You can also use a business line of credit to pay off higher interest business debts. Trust Toronto Mortgages today for your business line of credit needs.