When it comes to business growth, few financing options are as versatile as lines of credit. These credit lines can come from multiple sources, including your bank, suppliers, and third-party financing companies. Once you have the credit line, you will need to know the best ways to use it for growth and get the best return on the investment.
Invest in Staffing
When you use your credit line to train or hire employees, you are investing in your staffing with the expectation that more customers will be helped more effectively, and your profits will grow. To know when you should hire versus when you should train, it is essential to look at where your business is most feeling the growing pains. If it is due to long wait times, then hiring more personnel will help, but if it is due to inconsistencies, then training is the answer.
You can use your lines of credit to purchase new, upgraded, or additional equipment to keep up with the growth you are experiencing elsewhere. The most effective units to buy with a credit line tend to be too expensive to work into the current cash flow but not pricey enough to justify a bank loan. With a credit line, these units can be in place and working to pay themselves off quickly.
Stock Your Inventory
Another excellent growth use for your credit line is stocking your inventory, especially before the busy season or in anticipation of an extensive project. For instance, if you run a seasonal business selling custom or hand-crafted items, it is beneficial for your company to stock up on supplies during the off-season and start building as much product as possible before it gets busy again.
Boost Your Marketing
Marketing is another excellent investment for the funds available on your credit line because you are targeting and bringing in new customers. Marketing campaigns are essential for your company’s survival but boosting them during times of growth can be critical for the success of your expansion. For instance, if you are moving locations and having a moving sale to reduce the inventory you must relocate, you will need to boost your marketing to let new and existing customers know about the sale and the latest company location.
Business lines of credit are a versatile funding source for companies of all sizes and can help ease growing pains when you know where to use the money. Some suitable investments of your credit line funding include hiring or training staff, increasing your inventory, and marketing your company.