Why You Should Consider a Business Line of Credit
Whether you consider your business to be the top dog in the neighborhood or the new kid on the block, you must outpace the competition in order to survive. For this, you will need money for your business fast, which is why you should consider a quick business line credit (LOC).
To be successful in business, you must consider cash to be king. And a business line of credit should be in the kingdom of every business.
Reasons You Should Consider a Business Line of Credit for Your Company
Regardless of whether you are a for-profit business or a nonprofit organization, a line of credit (LOC) is an ideal safety net. There are numerous reasons why you should have one for your business.
1.Organizations should have a LOC in place due to the unpredictable nature of cash flow, which can go up and down unexpectedly. Often a LOC is used to pay off very important expenses that you should never miss, like payroll, paying an important supplier, and taking care of past due bills which you cannot defer any longer. For these things, you need cash.
2.LOCs can also help you take advantage of growth opportunities, such as market demand, new customer, or new marketing initiatives. The most successful businesses are the ones that have a LOC in place just in case.
3.A LOC helps a business owner have a backup plan and reduces stressful situations. There is nothing scarier than realizing you may miss payroll or when a crucial piece of equipment breaks down. When these kinds of situations occur, you can only focus on them, instead of growing your business. With a supply of cash at your fingertips, you won’t have to worry that these occurrences will cause you to close your business.
4.Once you get the LOC in place it is much easier to keep in in place year after year. Just like it’s simpler to keep a customer you already have than to go out and find new ones, if you have a LOC, you can renew it without having to reapply. As long as you still want it and you remain in good standing with your lender, it can stay open and available.
5.Unlike a traditional fast business loan, you can use a LOC for any business expense. With a loan, you must state a specific reason why you need the money, like purchasing a new building, increasing inventory or to boost your working capital supply. You can use your LOC for these things but it is also a lifeline when it’s time to make payroll, pay business taxes or to even out cash flow.
6.A LOC is less expensive than other financing options. Other kinds of emergency business loans are not as flexible. Some small business owners utilize credit cards for extra cash. However, credit cards often come with a high interest rate and the company will charge significantly more if you withdraw cash from your card. You could also use your overdraft service if you run into cash flow issues. On the contrary, each time you do this, you will pay a substantial fee. Additionally, being constantly overdrawn is no way to run a business account or a company.
Why You Should Not Think about a Business Line of Credit from a Bank
Most business owners don’t think about getting a LOC in place until it is too late and that is actually the worst time to apply. By then, your finances are typically in disarray and commercial banks are unlikely to grant you an emergency company loan. However, even if you do qualify, there are numerous reasons why a bank is not the place to go for a LOC.
Bank lines of credit take a very long time to get in place, often 2-3 months or more. Even worse, they can be really expensive. This is due to initial charges as well as yearly charges that the bank will impose. You have to pay these fees even if you don’t use line. In addition, banks require 100 percent collateral to back up your line.
The amount of paperwork required to get bank line of credit in place makes it pointless to even try. Banks have extensive business loan applications that will take you days to complete. You must also supply financial reports, years’ worth of tax returns, your full credit history, account statements and more. In the end, it’s likely that they will deny you anyway.
With banks, there are also complex terms and hard to meet conditions you must abide by to get and keep a LOC. For example, there is typically a fee just to withdraw your money. You pay these fees on top of the high interest rate that they typically impose on small businesses.
You could get yourself into further financial difficulty. A bank line of credit is great for companies that are careful to use it only when necessary. The interest rate on these quick business loans is often high. Therefore, making too many withdrawals could lead to circumstances where you can’t make the payments.
Where is the Best Place to Consider Getting a Business Line of Credit?
Financing Solutions (www.financingsolutionsnow.com) has a very unique LOC because it doesn’t cost anything to set up or keep in place. There is only a charge when you actually use the line.
Most funding institutions insist that you pledge collateral in order to obtain any type of fast business cash. This may include commercial property, equipment, accounts receivable or other assets. In most cases, these things will not be enough and you will have to put your home on the line to secure the funding. As a result, you are putting both your home and your business in danger if you can’t repay the money. A LOC from Financing Solutions does not require any collateral.
We preapprove you based on a few simple documents and your LOC will be place in 24-72 hours. You can use the line immediately or you can just have it there just in case.
Things you must consider to have a Successful Business
What you must do to stay relevant – times (and customers) change and you have to change with them. It is important to ensure your product continues to keep up with customer demand and needs. For instance, not too long ago, advertising, email and face-to-face contact were the only ways to reach customers and prospects. Now, you can send an invitation directly to their cell phones anytime they are near your establishment. In turn, they can engage with you on social media. They can also ask questions and offer honest feedback to your company in real time. By taking full advantage of these opportunities, you can convert leads faster and create ambassadors for your brand.
Listening to others – with so much to do, it is easy to get stagnant. Getting set in your ways is the beginning of the end for your business. Fresh ideas and learning new ways to perform old processes can keep your business innovative and energetic. It is also the best way to discover what customers want and ensure you are the company to provide it. Seek advice and input from everyone from leaders in your industry to cab drivers. This may require finding opportunities for interaction with others in your industry, keeping your ego in check and discovering new methods of small business funding. After all, you never know where your next customer or big break will come from.
Delegating more – as a small business owner, there is often a tendency to do everything yourself. Since you know your business better than anyone else, you can probably do most of the jobs your organization requires. Unfortunately, this attitude and behavior only serve to steal your focus away from what really matters: growth and survival. You must hire the right people and then trust them to get the job done. Doing this allows you to direct your energies on factors like defining your ideal customer, perfecting your brand and obtaining enough quick business capital.
How to provide even greater customer service – today it is no longer enough to do the minimum. Of course you must be friendly, have good knowledge of your product and remember that the customer is always right. However, these days, customers demand an exceptional overall experience and connection with your brand. If this seems like hard work, it is but you are nothing if you do not have customers. Therefore, you must treat your customers as individuals. Give more than they expect. Uncover the things that customers are not getting from the competition and capitalize on it. Get to know their motivations and desires. Address them by name. Most importantly, be authentic in every customer touch point.
Finding the right source for small business funding – having a place to turn for instant business financing is not helpful if they make you jump through too many hoops. Knowing what kind of funding you need is useless without the right funder. Financing Solutions is the best of both. We will give you the appropriate funding as soon as you need it. We want to help with the progress and success story of your business.