BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -A line of credit lets a business borrow up to a certain amount of money and will only charge interest on the amount of money borrowed. It’s unlike a traditional loan where you’d be given a lump sum of money that you’d pay back with interest in monthly payments.

Detailed explanation-2: -A line of credit (also known as a “bank operating loan” is a short-term, flexible loan that a business can use as needed to borrow up to a pre-set amount of money. A line of credit is convenient for bridging gaps between the points when accounts payable are settled and accounts receivable are collected.

Detailed explanation-3: -The number-one reason to open a business line of credit is to gain access to short-term funding. Most businesses use these funds to support financing for operational expenses like supplies and payroll or for increasing inventory.

Detailed explanation-4: -A line of credit is a flexible loan from a bank or financial institution. Similar to a credit card with a set credit limit, a line of credit is a defined amount of money that you can access as needed and use as you wish. Then, you can repay what you used immediately or over time.