Finimpact

FAQs

Is a secured business line of credit the same as a secured loan?

No. A secured loan offers a lump sum amount of money. In contrast, a secured business line of credit gives you access to a sum of money. But you’ll have the option to spend the funds on an as-needed basis. 

Can I pay off my secured business line of credit early?

Yes. You have the option to pay off your secured business line of credit early. Before paying off the loan, confirm that the lender doesn’t charge any early repayment penalties. 

Can I use a secured business line of credit to pay off other debts?

Yes. In many cases, you can use a secured business line of credit to pay off other business debts. However, it’s important to compare interest rates before moving forward. 

How does a secured business line of credit affect my credit score?

A secured business line of credit can have a positive impact on your credit score if you make on-time payments. If you don’t make on-time payments, this line of credit could hurt your credit score. 

What happens if I default on my secured business line of credit?

If you default on a secured business line of credit, the lender will seize your collateral assets. 

About the Author

Sarah Sharkey

Sarah Sharkey

Personal Finance Writer

Sarah Sharkey is a personal finance writer who enjoys helping people make better financial decisions.

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