If you have had your business for a year or two, then you know by now that cash is not always readily available, even if you do have a great service and some pretty great clients who keep the money rolling in. Sure, you have enough to pay your bills and your employees, but you may not have enough to get some new employees to help you deal with all that growth or a new piece of equipment that you absolutely need for packaging or maybe production. Does this mean you throw in the towel and just stay where you are? No! You get some help, and by that, we don’t mean a loan; we mean it’s distantly related – better performing and better-looking cousin – the business credit line! Let’s get to know this business credit line, shall we?
A Brief Synopsis of The Business Credit Line
Say you need money for you and your business. You hear of someone called Bluevine who gives money to people like you. You head on over to this Bluevine and talk to them and they give you some pretty good terms with a pot of money to go along with it. This pot of money has a limit to it, and you can take what you need when you need it. However, those terms state you only pay back with interest on only what you use. The rest stays in the pot, or you can hand it back to Bluevine. This dear business owner is what a business line of credit is all about!
Ways A Business Credit Line Can Help You Grow
Ok— so what’s there to like about credit lines? Well, here are five things you can actually do with a business credit line:
- Act Quickly: A credit line is liquid and can be used at a moment’s notice. This is useful for merchants that sell in bulk, or regularly need access to quick sales capital, or simply make purchases if necessary.
- Solve Seasonal Cash Flow Issues: Your businesses sales can be subject to a variety of factors, including competition, marketability, and even the weather. A credit line will help you cover expenses and bills during slower times, allowing you to keep on borrowing until your working capital can help you handle the rest.
- Restock: Businesses that need to restock quickly can use their credit line to make immediate payments for new inventory.
- New Marketing Opportunities: Fund promotional programs that can attract new customers to the store, as well as leverage sales capital you need to finance other advertising or initiatives. Furthermore, you can use a credit line for funding new ventures or ad campaigns for a product launch.
- Credit Line Reporting: The more lines of credit you have at hand, the faster you can build up your credit score and credit profile. This can enable your business to get the best rates on merchant cash advances, small business loans and lines of credit, equipment financing, and even secure credit and debit checkout financing, among other financial products.
What To Look For Terms-Wise In Business Credit Line
Not all business credit lines are created equal. Here are some things to look out for:
- Interest Rates: Favor lower rates for more savings.
- Fees: Are there hidden fees that will eat up your take-home?
- Draw Periods: How long do you have to draw against your line before you start repaying?
- Repayment Terms: How can you repay the funds? How flexible is the line with repayment options?
- Credit Limit: Ensure the limit aligns with your growth goals.
Ideal Practices With A Business Credit Line
There’s more to a good business line of credit than just cheap capital! These are some best practices to help you get the most out of a business line of credit.
Don’t Be Greedy
When you get a business line of credit, there is a temptation to draw the whole thing down! But it’s the worst thing you can do!
Don’t do it! Borrow only what you need (and less than you think you need). Your business loan must be paid back, and you will feel that during your monthly business cash flow cycles.
Pay The Piper
Don’t be late on a payment! The rates on a business line of credit will be high enough. You don’t want any extra fees, late payments, or higher long-term rates! Set a limit for yourself, and don’t allow yourself to stretch it. Set up auto-pay so you never have to think about it or – worse – forget.
Use The Right Lender
Get a good alternative lender! There are many options out there, with Bluevine being a common business line of credit option for startups and entrepreneurs.
The Business Line of Credit: Your Enterprises Little Weapon
Borrowing may sound like one of the most terrifying things to do, and we get your trepidation – but it also just might be a weapon that could help you stay afloat in those lean times and a piece of the ladder that can help you to seize the day and grow when you are a little cash strapped. So why not check out Bluevine and do your enterprise a favor?
