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Types of Credit for You and your Business
To run a successful business, it needs cash flow. The business must be able to purchase products, supplies, pay its employees, vendors and creditors. There are many ways to increase cash flow such as; sales revenue, owner's investment or obtaining lines of credit. Some of the types of credit are; personal, vendor and business credit. It is important to understand the difference between each type.
The following, outlines some of their characteristics of the different types of Credit:
PERSONAL CREDIT
- Lines of credit from banks or credit cards
- It is liquid and can be used for purchasing almost anything
- Based on personal credit history and FICO score
- You are the personal guarantor of the loan
- In case of default you will be held liable for debt
- Loan will show up on your personal credit report and will reflect positive or negative history based on your payment behavior on this type of loan
VENDOR CREDIT
- Lines of credit from specific vendors: Best Buy, Office Depot, Home Depot etc.
- It is an open credit account with a limit that can only be used to purchase goods from the vendor
- Usually has a net 30 day terms of repayment
- Based on business credit history not personal
- Will report payment history to business credit bureaus
- If your business qualifies, does not need you to be a personal guarantor
- In case of default business will be held liable for debt, not you
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BUSINESS CREDIT
- Lines of credit from banks or credit cards
- It is liquid and can be used for purchasing almost anything
- Based on business credit history and not personal
- Does not require you as personal guarantor
- Will report payment history to business credit bureaus
- May require an agent of company to guarantee loan
- Will not show up on personal credit history
- In case of default business will be held liable for debt, not you nor the company agent
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For further information or clarification on how to obtain an unsecured line of credit for your business, contact C&C Capital Lending toll free at 866-552-9267 or visit www.unsecuredlines.biz
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