How Manufacturing Businesses Can Use Lines of Credit
Jumpstart your manufacturing business with a line of credit today. Whether you’re entering a slow season or ramping up for the holidays, your manufacturing facility can always use additional working capital. Learn how to utilize lines of credit effectively to improve your cash flow and increase your profits.
A line of credit is a flexible financing tool that allows you to take out a loan whenever you need it. Unlike a bank loan, you’re pre-approved for the credit you need, so you don’t need to worry about approval for each expense. You don’t start accruing interest or making payments until you actually take out the loan, so it’s a great safety net to secure during good times and have in case of emergencies.
Slow periods are inevitable in manufacturing. Whether it’s a slump after a big push or just a transitional time in your plant, slower sales can stall your company and risk layoffs. A line of credit allows you to take out a loan for payroll, inventory and other operating expenses as you float your plant through hard times. Once it’s over, you’ll be able to easily pay off your line of credit during the peak selling season. This strategy allows you to avoid constant layoffs, retraining and working with seasonal workers.
Another way to improve your current situation is taking on new customers. During peak seasons, you may have too many opportunities and not enough resources. Don’t turn away customers simply because you can’t afford the inventory and upfront costs with your current working capital. A line of credit gives you the cash you need now to invest in large clients and long-term growth strategies. Take out capital now in order to exponentially grow your manufacturing business.
Learn how you can take out a line of credit today. You’ll need proof of financial history and a strong credit score. Some credit options ask for security in the form of an asset, such as real estate or machinery. If you need to take out several smaller loans, you’ll need a revolving line of credit. A single, lump-sum can be accessed with a non-revolving line. Take advantage of the flexibility of a line of credit by spending it on any expense you deem necessary.
Shop around for a competitive line of credit today. Lines of credit come with a variety of terms, spending limits and interest rates, so work with a lender who will discuss your unique manufacturing situation and help you find the ideal financing solution to grow your business successfully.