What is a Business Line of Credit and How Should it be Used
2:45 Minutes long
Video Summary: What is a Business Line of Credit. How Should it be Used and What Should it not be Used for.
- A Business Line of Credit is a safety net that can be used for emergencies or opportunities.
- It should be used for short term business issues where it will be paid back in weeks or months.
- Every business owner or nonprofit executive director should have a line of credit in case it is needed.
- It is best to get a Business Line of Credit before you need it.
- Over my 25 year career, the Line of Credit has been extremely helpful and I was always thankful that I had it in place.
- You can get a Business Line of Credit from a bank or an alternative funder like Financing Solutions.
- A Bank will require collateral and it will take a lot of time to get it in place.
- It’s ok to use your line of credit as long as you have a good business.
- A Line of Credit shouldn’t be used if your business is failing.
- Most owners use their line when cash flow is down and payroll is due
- You can’t miss payroll. It is actually illegal and you can get into a lot of trouble by not paying it on time.
Author, Stephen Halasnik is a serial entrepreneur having built 7 successful businesses in the $5-$20 million revenue per year range over the last 25 years. One of those companies was on the Inc 500 fastest growing list. His latest company is Financing Solutions (www.financingsolutionsnow.com) which provides Lines of Credit to small businesses and nonprofits throughout the United States.