Leveraging a business line of credit is not a child’s play. Gibson Consulting has reached out to some of the top entrepreneurs in various fields and developed these Do's and Don’ts based on their expert opinions. Typically, lines of credit are like credit cards in that you are borrowing money and you repay this money when you reach a certain time limit defined by the creditor.
Here are some of the most important practices ( The "Do's" ) that must be joined while using business lines of credit:
1. Begin with the End in Your Mind:
People commit this mistake most of the time and take a line of credit as a portable petty cash fund, which results as a problem. So, think about the consequences of your actions before you tap into it.
2. Use a Line of Credit to Keep Your Business Running Smooth:
A line of credit is one of the best options to bridge up the gap of cash flow. You can use this money to run your business smoothly, as often you get revenue much later than you expected. In these cases, credit can be to pay vendors and employees. This is how your business will keep on running without any interruptions.
While going with the choice of business lines of credit, do not make the following mistakes:
1. Don’t Forget to Comparison Shop:
If you want to leverage your business line of credit properly, shop around. All credit lines are not the same, so it is your responsibility to search for the lines of credit that suit your financial needs.
2. Don’t Pay Less Than the Minimum Payment:
Usually, people are hesitant to pay more than the minimum amount to the lenders. Nonetheless, it should be kept in mind that this is not your money, and eventually, you must give it back. So, try to pay as much as you can.
3. Don’t Wait Until You Need Credit to Establish it:
It is better for your company to access a line of credit before you need it even if you must let it sit there.
Ready for the next step? Contact Gibson Consulting to find out more about our line of credit options ranging from $25K to more than $100M+ for your business. Call 347.749-9297 or click here.