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The first negative is that unless your existing credit line is unlimited there might<br />
not be enough funding on your credit cards. The second negative to using<br />
personal credit cards is that your personal and business cash flow is not separate.<br />
This can create havoc if you need to use your credit for important personal needs<br />
and it can have a similar effect on business funds if you suddenly have to tap into<br />
your credit for personal reasons. Lastly, the interest rate on credit cards is<br />
normally much higher than any of the various types of business loans. Do you<br />
want to learn more? Visit Oak Park Financial.<br />
A Bridge Between Credit Cards and <strong>Business</strong> <strong>Loans</strong>: Lines of Credit<br />
A line of credit operates much the same as a credit card. You apply for a business<br />
loan line of credit and based on your qualifications you are approved for up to a<br />
certain amount. You are not charged on the loan until you actually use the money<br />
and are only charged for the amount you actually use. Another similarity between<br />
lines of credit and credit cards is the loan is often an unsecured loan meaning no<br />
assets are used to guarantee the loan such as homes, cars, the business itself.<br />
However, unlike a credit card business lines of credit have interest rates much<br />
closer to a traditional loan level.<br />
On the downside those interest rates are usually variable like a personal credit<br />
card and go up or down over the period of the loan. Another downside to lines of<br />
credit is that like a credit card your payments will usually be only a little more<br />
than the interest rate each month. Checkout OakParkFinancial.com for more<br />
info.
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