When we first started our business, we decided we would need a line of credit to cover any gaps in our income. When you work in the construction business, it can take anywhere from 30 to 90 days for a contractor to pay you. This leaves you with times that you may not see a check for a couple of months, and the bills don't wait! We already had our business checking account with National City, so we sat down with one of the loan officers, who was very helpful getting us started on a business line of credit loan. There was a short credit application to fill out and, of course, a credit report was done. Our credit was good, so we didn't have any trouble getting approved, and we were not required to put up any collateral.
The account was set up with a credit limit and can be accessed by either our credit card or checks. There is a minimum payment due every month, just like a regular credit card account. The rate is variable and depends on my credit score.
This line of credit was one of the tools we used to establish our credit, and has really helped us keep our business going, even in slow periods.