One thing many small or start-up businesses run into trouble with is managing cash flow. There are certain times of year that are simply busier than others, but the bills are a constant. How can you ensure you stay in the black during slow periods? With a business line of credit. There are a few things you need to do when you are considering applying for this safety net.
Understanding the benefits of such a line of credit is the first step. Not only will you be able to better manage seasonal credit demands, but you can also purchase inventory well ahead of the anticipated sales. This way, you can be well-prepared for when you expect business will pick up again. This is also helpful for start-ups that have a gap between buying inventory and collecting accounts receivable.
You probably already have a bank account set up with a local institution. You can discuss opening up a business line of credit with them, or you can consult with a company that specializes in providing this kind of service, such as Gold Beacon Capital Corp. Start-ups may run into issues trying to get a line of credit with a bank unless you can prove the business’ ability to repay the loan.
When you are trying to get the loan approved, there are several things that the bank or lender may request. If you are a start-up, you will likely be asked to bring your personal assets to the table. This could mean everything from your home to the value of your life insurance policies.
One key thing to have on-hand for Gold Beacon Capital is how you will repay the business line of credit. This will mean putting together your business plan, outlining projected sales. Additionally, if you cannot meet your projected targets, how will you come up with the money to pay the lender? Are there any other sources you can rely on?
Do not be surprised if you have to pay down your credit if you have not followed a payment schedule. Gold Beacon Capital often views these lines of credit as cyclical borrowing, and a failure to stick to your payment schedule would indicate a business’ inability to manage cash flow. Therefore, we may ask you to pay more that you expect over the next few installments.
A business line of credit is a great way for small businesses to manage their cash flow, so long as the business can repay the loan on time and as scheduled.
Read more about Gold Beacon Capital’s Unsecured Business Lines of Credit program!