Hey guys, JP here…
I've been browsing through the forum for someone to go over this topic.. I haven't really seen anything so I guess I'll start it.
I know that there are a number of ways to leverage your business and business loans and lines of credits seem to be the biggest ones that people refer to.
I did a bit of research and made a very superficial blog post but then I realized that there's got to be some people on here that really understand this and could give some really solid insight compared to some articles I found on nerdwallet or some blog.
I'm looking into this because I'm starting to research into importing/exporting and selling on a e-commerce store. I have a few and I've been looking into ways how to finance things safely.
It seems like the favorable choice would be the line of credit because of how it works.
The business line of credit works very differently than a business loan which is when a bank or lender is giving you a large lump sum and with a fixed interest rate and its backed by either a guarantee or collateral. (such as inventory, property, or equipment ) Which should gives you the ability to reuse and paying the line of credit off as you can and have some form of liquidity to the assets you have on hand to reinvest in growth.
Everything has their pros and cons but when it comes to flexibility and trying to cover several costs at once especially when starting something new that you don't have insight in. It might be better off going with the business line of credit because you’re only going to end up paying the interest of the amount of money you borrow. The only con is that you usually have access to less capital and the consequences can be pretty severe if you’re late on a payment in contrast to a loan.
When you’re working on cashflow and need to grab inventory or whatever to cover the next month’s forecast it might be best to go get a business line of credit.
The expectations is pretty low for a business to actually gain a pretty large line of credit which can go up to around 100k.
What I'm seeing that they usually ask for...
If you can meet the above requirements, It might be smart to grab a business line of credit to leverage the assets, make sure that you have a plan and a clear ROI in place before you start spending.
So... if there are people on here that are more well versed in this than I am, please elaborate or correct me!!
Thanks!
I've been browsing through the forum for someone to go over this topic.. I haven't really seen anything so I guess I'll start it.
I know that there are a number of ways to leverage your business and business loans and lines of credits seem to be the biggest ones that people refer to.
I did a bit of research and made a very superficial blog post but then I realized that there's got to be some people on here that really understand this and could give some really solid insight compared to some articles I found on nerdwallet or some blog.
I'm looking into this because I'm starting to research into importing/exporting and selling on a e-commerce store. I have a few and I've been looking into ways how to finance things safely.
It seems like the favorable choice would be the line of credit because of how it works.
The business line of credit works very differently than a business loan which is when a bank or lender is giving you a large lump sum and with a fixed interest rate and its backed by either a guarantee or collateral. (such as inventory, property, or equipment ) Which should gives you the ability to reuse and paying the line of credit off as you can and have some form of liquidity to the assets you have on hand to reinvest in growth.
Everything has their pros and cons but when it comes to flexibility and trying to cover several costs at once especially when starting something new that you don't have insight in. It might be better off going with the business line of credit because you’re only going to end up paying the interest of the amount of money you borrow. The only con is that you usually have access to less capital and the consequences can be pretty severe if you’re late on a payment in contrast to a loan.
When you’re working on cashflow and need to grab inventory or whatever to cover the next month’s forecast it might be best to go get a business line of credit.
The expectations is pretty low for a business to actually gain a pretty large line of credit which can go up to around 100k.
What I'm seeing that they usually ask for...
- A Business Checking Account
- 2 Months of profitable activity in a verified accounting software OR 3 months of transactions in your bank statements
- Not a requirement but a suggestion of a $50,000 in annual revenue
If you can meet the above requirements, It might be smart to grab a business line of credit to leverage the assets, make sure that you have a plan and a clear ROI in place before you start spending.
So... if there are people on here that are more well versed in this than I am, please elaborate or correct me!!
Thanks!
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