Common Business Uses for a Revolving Credit Line
A revolving credit line can be instrumental for your business to manage daily expenditure. Having easy access to working capital gives you the confidence to grow and thrive.
1. Seasonal Fluctuations
Businesses often experience upticks and downward trends depending on the season. This can leave companies scrambling to cover cash flow gaps. Securing a line of credit is a reliable way to keep things operating seamlessly during a sales slump.
2. Expanding to New Locations
Establishing store-fronts in multiple areas can be an exciting sign of growth. Opening a new physical location can also come with hefty up-front costs. Rather than stress about being strapped for cash, use your credit line to finance the expansion until your new business generates sustainable profit margins.
3. Hiring Employees
Tight operating budgets can leave little room to afford a growing labor force. Easily tap into a pool of funds so you can invest in the right talent at the right time, no matter the circumstances.
4. New and Upgraded Equipment
Increasing inventory and buying new equipment can be costly. Businesses can use a credit line to purchase what they need when they need it.
5. Invoicing Gaps
Waiting on invoice payments can create short-term cash flow gaps. A line of credit can make you feel in control of the situation when a client makes a late payment. Having a plan in place and extra cash available can help you deal with the worst in an organized and efficient manner.
Top Use Cases for Revolving Credit Line:
A revolving line of credit allows you to manage business costs as they come up. Below are popular ways business owners use financing to achieve their goals:
Unexpected Expenses:
Having flexible access to funding keeps you prepared for whatever life throws your way. Pay for one-time, unanticipated costs as they arise using your business line of credit.
Inventory:
Place buying orders and get the supplies you need to achieve success. An infusion of working capital at your disposal allows you to make forward-looking business choices.
Operational Costs:
Free up additional working capital to be used where you need it most. Flexibly withdraw funding, so you can ensure your regularly occurring bills are paid on time and in full.
Coronavirus Assistance:
The COVID-19 pandemic has disrupted the business ecosystem, disproportionately affecting small businesses. A revolving line of credit can be used as a lifeline when you need it most. Smooth over cash flow and tap into funds on an as-needed basis during these unprecedented times.
