Can a business have a line of credit and a business loan at the same time?

Yes, as long as each one is approved. A company might use a loan for a large purchase, such as equipment. A line of credit gives it room for ongoing costs like inventory or seasonal gaps.

How is a business credit card different from a business line of credit?

Both are revolving, so in that sense, lines of credit are similar to credit cards. A business credit card is another option, but it’s usually used for smaller everyday purchases. Lines of credit for business typically cover larger working capital needs, such as payroll or inventory. For routine spending, 1st National Bank offers business credit cards.

Which costs less, a business loan or a line of credit?

Neither financing option is cheaper in every case. The interest rate, fees, and collateral requirements vary by lender, product, and borrower. Loan interest applies to everything you borrowed. With lines of credit, interest applies only to what you draw, so a small draw repaid quickly can keep costs down.

Do I need collateral for a business loan or line of credit?

Not always, but it’s common. A business loan may be secured by the asset being purchased, such as equipment or property. A business line of credit may be secured by business assets or unsecured, depending on the lender and your finances. When you apply for a line of credit at 1st National Bank, you may be asked for details about your business assets.

How much can my business borrow?

There is no single answer. Lenders often consider your earnings, credit history, and any collateral. 1st National Bank provides lines of credit tailored to your company’s needs. A commercial lender can analyze your data and discuss a reasonable amount, as well as the applicable interest rate.