To be an entrepreneur, you must be willing to engage in some risk. After all, starting your own business is itself a risky undertaking. Obtaining an unsecured line of credit for your business can help you minimize that risk, however. It can provide you a financial cushion with flexible payment options, and it can help you increase your business credit score.

Perpetual Cushion

With an unsecured business line of credit, you always have whatever amount of credit remains at your disposal. Unlike traditional loans, a line of credit can be reused once it is paid. If, for example, you have a $15,000 limit on your business card, and you use $2500, the amount of money available to you is only reduced until you make a payment. Once you pay back a portion or all of the money you have borrowed, your available credit increases. If you are able to make generous payments regularly, you not only save money you would have paid in interest, you also give yourself a financial cushion in the event of a business emergency.

Flexible Billing

Traditional loans release the whole amount of the loan up front. This is an attractive quality as long as you need the entire amount immediately. Otherwise, you will be paying back interest on money you might not even need. With an unsecured business line of credit, you can use money as you need it. If you need the whole amount, it is available to you. If you do not, however, you only have to take advantage of and thus pay interest on what you do need. This can save you quite a bit of money in interest payments in the long run.

Credit Building

Something that might be of particular interest to a new business owner is establishing good credit. Your credit score influences your ability to obtain loans. Using an unsecured business line of credit responsibly allows you the opportunity to build your credit without risking assets as collateral and without putting your own personal finances in jeopardy. Faithful, on-time payment of at least the minimum amount due and a demonstration of restraint in not using the whole line of credit up front can increase your business credit score.

There may come a time when your company may need extra cash flow. Not many lending options offer you revolving credit, flexible billing and an easy way to build your credit. You can take some of the risk out of entrepreneurship with an unsecured line of credit for your business.