Business Lines Of Credit
Business LOC (Lines Of Credit)
It is a safe assumption that most small business owners have never been accused of over-preparing or over planning for the financial future. If a series of bar graphs representing the most common causes of company failures were created, under-planning and under-funding would tower over every other category. If maintaining easy access to cash for inventory and equipment could be compared to a trip across the desert, the analogy would be obvious.
The hiker with the canteen would probably not fare as well as the driver of a Jeep filled with gas, a fully stocked ice chest of food and water and a navigation system. For business owners who like the odds on the hiker, there is always the lottery, for everyone else; there is the concept of a business line of credit .
When to say “When” – Credit Lines
For those able to predict the very bottom of a stock cycle, the amount of annual rain in tenths of an inch and the next World Series Champion in January, there is no need for establishing a business line of credit. For everyone else on the planet, a credit line may serve as the difference between expansion and long-term success or closing the doors forever. If cash flow is, as most experts agree on the lifeblood of any business, having too little would cause more problems than storing a couple of extra pints at the local blood bank. For most entrepreneurs, a Business LOC might be the most ingenious invention since the Boy Scout Knife.
Emergencies or catastrophes are seldom courteous when it comes to scheduling an appointment and have a tendency to just “drop in” unannounced. Most business owners realize that the only pleasant surprise when it comes to financial matters is when the people show up holding a giant cardboard check. In today’s tech-shifting environment, the consumer-savvy society often requires particular attention with each breakthrough and advancement almost in real time. The result in the forward progress often requires the need for significant inventory updates or complete product offering makeovers. The only common trait that business-related calamities share that remains uniform throughout the gamut of sectors is the requirement for cash infusions to correct the situations.
Business Credit Line The New Insurance
The best part about opening a line of credit as opposed to taking out a small business loan is that no fees or costs are incurred until the money is needed. Ten percent interest on an even a million dollar credit line is still zero until the money is borrowed. Unlike other lending products, the advantages include timing, timing and most of all timing. A cash flow emergency never becomes critical unless there is a shortage and the lack of a healthy revenue stream is the number one killer in the world of small business.
A business line of credit is exactly like offering health insurance for a business with no premiums due until after an illness with no risk of claim denials or lapse in coverage. Smart planning has two definitions – being lucky enough never to hit bottom or being sensible enough to provide for a bounce. The perfect balance of confidence and fear are what makes for an inspiring and long lasting example of a small business success story. a line of credit is just one tool of the many different loans for small businesses available.