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How to Get a Working Capital Line of Credit for a Startup

Starting a new business is difficult work. It takes significant amounts of time, energy, and money to get your business up and running. You need to get your office set up and ready for business. However, you will still need liquid capital to purchase more inventory and meet other needs to keep your business functioning. Maintaining working capital in the beginning can be extremely difficult while you wait for your customers to pay their accounts. Fortunately, there are ways to alleviate this bottleneck in your cash flow. Working capital lines of credit for small businesses in Austell, GA. are a great way to keep your business going. Let’s look at your options for getting a working capital line of credit:

  • Bank Overdraft – Some banks will allow you to set up a bank overdraft that allows you to pull more money from your checking account than you have. It’s usually quite limited in the amount of money available though and this is often not available to a new start business without a trading history.
  • Advances received from customers – Customers will sometimes, if you are lucky, prepay for services. This is to your advantage because it keeps your cash flow moving allowing you to pay for inventory ahead of time. Many businesses will try to offer a discount for prepayment but this will negatively affect your profit margins and is unlikely to be sustainable.
  • Credit Cards – drawing on your credit card is fast, but limited and expensive if you are unable to pay off the balance when due.
  • Borrow from Friends and Family – generally never a good idea and can cause strain on your relationship with loved ones.

Here is your solution to your problem. Factoring. Factoring is a popular and easy way to get a working capital line of credit that grows with your business. You sell your invoices to a third party at a discount. The Factor then collects the invoices from your customers directly. Factoring provides a steady and predictable income stream and an invaluable back office support service as part of the facility saving you from doing more mundane administrative tasks when you need to be driving your business forward.

Starting up your business doesn’t have to be stressful and restrictive. Using various methods of working capital funding in Austell, GA, will keep your business moving through the difficult time of getting up and running. Transitioning from launching your business to being a successful business can be nearly impossible if you don’t have the working capital to pay your bills and purchase inventory. Many start-ups fail for this reason. Working capital lines of credit can be the difference between success and failure. Make sure that you are using the funding wisely and your business will be sure to succeed.