When you compare the pros and cons, you can quickly see there’s a lot to be said for taking the line of credit option. But if you need further convincing, here are a few more benefits to keep in mind.
It’s another business tool
Having a line of credit can do more than solve financial issues. So you can also take advantage of new opportunities that come your way, or meet other short-term needs that arise helping you improve your business.
In fact, many small businesses take a strategic approach to using a line of credit to make sure they have access to the resources they require to meet day-to-day working capital needs and fill other short-term financial necessities.
An additional business strategy is to use a line of credit as part of a larger capital access approach, including short-term and longer-term financing to fuel growth and fund other revenue-generating projects. For instance, a line of credit could be used for purchasing inventory, repairing business-critical equipment, financing a much-needed marketing campaign, or bridging a seasonal cash flow gap.
Here are a few examples of everyday small business situations where a line of credit could prove a good idea.
Perhaps you’re a seasonal business that generates most of your sales in the summer. You could use a line of credit in the offseason to help cover overheads as you bridge from one season to the next. Having a line of credit could allow you to maintain normal business operations even though your income fluctuates due to seasonal trade.
If you need to do a better job of getting your name out there, or you have something special you’d like to promote, you could use a line of credit to finance a marketing campaign to attract new customers and expand sales. It’s a move you could recoup quickly from because the campaign would potentially generate additional revenue.
Another example is if your business needed to buy parts or materials for the next job, while you are still waiting for payment from the previous jobs. Having a line of credit at your disposal could be useful for cash management and save you a lot of stress.
Get the ball rolling
If you think a line of credit could be useful right now for your small business, get in touch with Propell about small business finance that can keep your business moving forward. With a line of credit up to $100K, plus customer card repayments, Propell can help you keep going strong now and into the future.