People use the phrase “cut off your nose to spite your face” to describe a quick decision that will not help you in the long run. That’s what it’s like when you put off getting business financing because you are worried about line of credit rates.
In truth, line of credit rates are of no concern to most small business owners. They are only important for long term financing. Once you learn more, you can decide if a business line of credit is right for you.
How Line of Credit Rates Work
Every business has ups and downs in cash flow. Many business owners would love to get a line of credit (LOC) in place for their companies. A LOC allows a business owner to even out that cash flow by utilizing a line and paying it back when things improve.
Most people evaluate loans based on annual percentage rates (APR). However, when it comes to a LOC, that APR is irrelevant because most businesses use a LOC for very short term needs.
For example, let’s say you use $10,000 of your line and you pay it back in 5-7 days when a check comes in. Then, imagine that the cost during that time would be about $300. This makes it insignificant because:
1) As a business owner, that $300 is less important than what you would do with the money. With $10,000 you could make payroll, pay that important expense, or get those supplies needed for a job
2) The APR for the example above was 150%. This may sound like a lot until you realize that you just saved your company with only $300 extra. Therefore, for short term financing, APR doesn’t really matter.
Where Can You Go for Competitive Line of Credit Rates
Financing Solutions (www.financingsolutionsnow.com) is one of the first alternative lenders to offer line of credit rates that are as competitive as traditional banks. However, unlike a bank, you can get your line in place in days instead of months.
With help from Financing Solutions, you don’t have to take money from other areas of your business to fund projects. They have line of credit products from $5,000 to $150,000 with no long term commitment.
Factors that Are Important to Your Business
In the chaos that can come from running a small business, it’s easy to miss something. However, there are some things that should never be put on the back burner to deal with later.
One of the most vital aspects in the success of your business is you. You must know what drives you, what you stand for and how much you can take. Use this knowledge as a guidebook for how you will run your business. When you have a clear idea for what you want to achieve, you can share it with everyone else. This will help determine everything from your company culture to staff roles. Also, make sure you are taking care of your own health so you will be physically able to accomplish your goals.
You should also pay close attention to customer satisfaction. This includes customer service and quality control. It’s not necessary to be on Undercover Boss to learn how customers are feeling and how you can improve. Just ask.
Perhaps the most important factor is cash flow. You can get help is this area with quick business funding from Financing Solutions.
