Who doesn’t love the holidays?
Sleigh bells are ringing, the Christmas music is playing – and everybody is stress free…..
Okay, I might have gone too far on that last part, but you get the hint – Holidays are both exciting and “eventful” for everybody.
But it seems like Entrepreneurs get to enjoy this a little more than everybody else.
A Line of Credit Can Make Your Life Easier
The end of the year isn’t just busy for shoppers, it’s also busy for business owners.
You might have to hire seasonal employees, and you might have to purchase more inventory – but one things for sure….you will be working more.
And don’t take this in a bad way. Working more could (should) mean more money – a nice way to offset the damage December can have on your bank account.
But don’t let this go too far and ruin your holiday season, or even worse – your upcoming year, either.
There’s a lot of ways to prevent this, but in our world – we like financial solutions.
Financial solutions that take care of the seasonal stress and lets you enjoy this time of the year…..so you can get ready to double your sales next year.
What kind of financial solution can do this for you?
A Business Line of Credit
I know you didn’t sign up for a Finance class when you viewed this article – so I won’t go into a lot of detail.
But just so we’re on the same page, when I say a Line of Credit – I’m relating to a Business Line of Credit….
Which is pretty much the same as a Personal Line of Credit, it just has a few other features that’s designed to help your business grow.
Like larger loan amounts, because what good does $5K do for you?
Or it could be favorable repayment terms…really helpful if you’re a Seasonal Company that doesn’t have income in certain months (i.e. Construction during the Winter).
But either way, a Line of Credit is a traditional bank loan that allows for flexibility and freedom.
Which is why it’s also referred to as an “open-ended” loan.
Unlike traditional term loans (a.k.a “close-ended” loans), a line of credit doesn’t have set monthly payments – and you don’t have to use the full amount either.
This allows you to grow your business, or catch-up on bills – your way and on your terms.
The options are endless for what a line of credit could do for you, but the following list shows the Top 9 Ways Entrepreneurs Will Use Their Line of Credit to Start Off the New Year.
7 Ways a Line of Credit Can Help You
New Year, New You
New Year’s Resolutions, we all have them. For me, it’s usually diet or exercise related.
This is the year I’m going to get a gym membership, ask every Grocery Store in town to deny my snack food purchases….and by February – I should be in shape. I just don’t want to overdo it, I don’t want people to think my muscles are too big.
But as I’m sure you could guess, this never used to happen. Why?
Because I never knew how to get started.
Of course I wanted to start going to the gym and become a slightly more normal version of the Rock – but when you don’t know where you’re going….any road will take you there.
And that’s the same thing that happens to a lot of business owners.
A good example is growing your business, something every entrepreneur is ALWAYS thinking of.
Not to the point of having a tower on Wall Street – but to the point of living an amazing life.
A point to where your business is always making money….whether you’re there or not.
And a point that lets you enjoy life’s luxuries….without a lot of the stress.
A line of credit might not teach you how to grow your business, but it shows you where to get started……
And it gives you the freedom to get there…..all at your own pace.
So if you’ve had ideas that’ll grow your business but you’re just not sure how to get there – a Business Line of Credit might be exactly what you’ve been looking for.
Carrying on with the “grow your business” theme – a lot of companies like to increase their advertising in the New Year.
This advertising could be for a new product, or it could be used to mitigate the slowest time of the year – what some refer to as the “holiday hangover”.
But at the end of the day, increased advertising all comes down to one thing – increased sales….
That (should) turn into increased profits.
And if you can find an advertising source that puts more money in the bank (than it takes) – then you’ve set up a “passive” source of income.
But you have-to-spend money – to make money. And you have-to-have money – to spend money.
A line of credit can fill this void, giving you the sales you need in these historically slow months.
Survive the “Cash Crunch”
We’ve been focused on growing your business, and that’s still what we want to do.
But at the same time, a business can’t grow if it’s not open…
And that’s exactly what a line of credit can prevent.
I think we’ve discussed the toll that the holidays can have on your bank account – and it can be hard to pay your bills while you’re recovering from it…
Even if you had a good December.
As you’re aware, sales doesn’t always equal cash – not right away at least. For most companies, they’re stuck running around and chasing their customers (learn more about this – here) – trying to collect invoices that they’ve already earned.
It might be past due sales, or your customers might be in the same boat as you – but either way, a line of credit can solve these problems.
Let a line of credit bridge the temporary gap between sales and cash – letting you pay the bills and keep the doors open in the meantime.
Uncle Sam. You can’t live with him, but you can’t live without him.
He likes to take a portion of your money every year, but he promises to repay the benefits. Something about new roads and civil services.
This is all fine and dandy, but why does he pick such an inopportune time?
You’re already busy, and you’ve already been hit with enough bills – but NOW Uncle Sam wants his payment (or, depending on your business – your last quarterly payment).
I’m sure your CPA is going to knock down Uncle Sam’s Invoice as much as possible, but the additional expense still isn’t welcome.
Let your line of credit take care of Uncle Sam’s payment now – so you can deal with it later (when business is back in full swing).
Replenish Your Materials
If your business carries materials or products, the warehouse tends to look bare around this time of the year.
Which is usually a good thing, because that (hopefully) means you’ve had a lot of sales…
But it’s hard to continuing getting these sales if you can’t continue getting materials or products.
It takes cash to do this, and as you guessed – a line of credit will help.
Replenish your stock and keep getting sales with a line of credit.
Survive the Dreaded Returns
Nothing ruins sales like returns, but unfortunately – they’re a necessary evil.
If you want to sell more products by offering guarantees – then you have to get ready for the unanticipated returns.
Hopefully these returns will be small and your existing cash can handle them – but it’s always better to be safe than sorry.
And that’s one of the better qualities a line of credit has.
You don’t want to take out a term loan and make unnecessary payments on excess cash that you don’t need (i.e. – If you over-anticipated returns)….
But then you don’t want to risk it and tell customers it’ll be a few weeks before they can return their product (And I’m no psychologist – but I have a feeling they won’t be doing business with you anymore if you do).
So what do you do? You let a line of credit be your safety net.
If you don’t use it, great.
If you have to use it, that’s fine too.
Be prepared for any unexpected returns, or circumstances, and start off the year with a safety net.
Save Your Sanity (YOU ARE YOUR BUSINESS)
So this one pretty much serves as a wrap-up for the first 6 points, but a line of credit is all about helping you.
You are your business, and if you’re not able to focus on growing your business – then your business won’t grow.
Things happen, but you shouldn’t have to spend weeks worrying about them.
Take on life’s obstacles with a line of credit by your side.
It could be doubling your sales, or it could be paying your taxes – but one things for sure….a line of credit will help you, and your business – (even if you don’t have to use it).
Conclusion – Line of Credit
Don’t let unexpected expenses (or cash flow issues) ruin your holiday season.
It’ll be busy, there’s no doubt, but it doesn’t have to be stressful.
If you think additional cash could help during certain times…
Or if you think a safety net would slow down your racing mind….
Had trouble in the past and not sure if your company will qualify for a line of credit? Don’t worry, we have you covered!
Our team will find a Cash Flow solution that benefits you in every way a line of credit does….
But we can only do this if you let us know.
Questions or comments? Please leave below – and we’ll be in touch!