Does your business need a flexible lifeline to handle any emergency expenses? From small businesses just getting on their feet to major corporations in the midst of aggressive growth, nearly every company can benefit from the convenience of lines of credit. With several options to choose from, learn how you can select the best line of credit for your business.

While the exact details can vary dramatically, most credit lines work in similar ways. A line of credit is an open account with a maximum spending amount. Similar to a credit card, your business is pre-approved for a particular amount and can spend any amount up to that ceiling. You aren’t charged interest until you take advantage of this credit. A line of credit is designed to be a flexible emergency account in the event of poor cash flow or a sudden expense.

Choose between an unsecured and a secured line of credit. Unsecured lines of credit tend to be more difficult to receive. These credit options don’t include any asset backing, which means that you need to establish yourself as a highly trustworthy business. Expect higher interest rates, lower credit limits and a more stringent application process.

A secured line of credit uses a business asset as backing. This ensures that your lender will receive payment in the event of a default. Typical collateral includes real estate, valuable equipment or even inventory. While you can typically enjoy lower interest rates, higher credit limits and an easier application, you’ll take on much of the risk of the loan, since you could lose your essential equipment or property if you are unable to pay off your loan.

There are many financial institutions that provide a line of credit for your business or personal spending. From banks to private investors or online service providers, you have many options to choose from. Select a lender who doesn’t use hidden fees, makes it easy for you to apply and allows you the greatest flexibility with your credit disbursement. You can expect to pay a small monthly or yearly fee for the benefit of a line of credit account, but consider working with a company who doesn’t hide fees or use a complicated pay schedule designed to trick you.

Find out today whether secured or unsecured lines of credit are right for your business. Whether you need to float some cash over a slow season or need a security net in the event of an emergency, a line of credit can be a powerful tool to ensure your business thrives in a competitive industry.