Line of Credit – Understanding repayment, fees, and use
Unlike a term loan where the borrower receives a lump sum and repays the total amount borrowed back in installments, a small business line of credit revolves; as borrowed funds are repaid, they are immediately eligible to be borrowed again. Borrowers are given a limit, which is the maximum amount eligible for withdrawal at any given time. Interest charges are only assessed on the money withdrawn, not on the entire limit. For entrepreneurs seeking short-term capital or a pool of funds available for unanticipated expenses, a line of credit is an efficient option.
To provide the best rates and terms for our clients, DreamSpring may require collateral for loan approval.