Small businesses rely heavily on funding, both while starting up and during day-to-day operations. If you’re a small business owner, flexible or revolving credit lines can be a lifesaver in times of need.
Essentially, a revolving line of credit like the one offered by MoneyTap allows you to access funds anytime, anywhere you need them and pay them back over time. As opposed to a business or personal loan, you will only be paying interest on the amount of money you use, not the entire approved limit.

This credit line option can prove very useful in the following situations:

1. Marketing Effectively

You may avoid spending too much money on marketing and sales efforts when you’re facing cash flow problems. However, you cannot grow your business or even retain existing customers without effective advertising.

A line of credit can help you pay for expenses such as hosting seminars or events in your local area, hiring social media and online marketing experts, posting ads on popular websites or print media, and more. Pumping a little extra money into your marketing functions could pay off in a big way, so don’t slide on this front!

2. Surviving Ups-and-Downs

Every business faces a slow season now and then, and you need to have a financial backup that will see you through. Whether it’s paying vendors for goods and services or making payroll, revolving credit could be your safety net.

Take a personal loan from your credit line to manage ongoing costs, and repay it when business picks up again. On the other hand, if you face a sudden and unexpected rise in demand, you will need ready cash to pay for inventory, part-time staff and other expenses. A flexible source of emergency funds can keep you afloat through either scenario.

3. Growing Your Team

If your business demands have grown and you need to hire more people, wasting time is not an option. A line of credit can help you meet staffing requirements and recruitment costs without throwing your budget out of balance.

It isn’t a good idea to put off hiring employees because you’re worried about how it will affect your cash flow. Not only does this put more stress on existing team members, but also affects customer experience and business efficiency. If hiring more people will help your business function better, you need to do it quickly!

4. Investing in Employees

If you’re like many small business owners, every member of your team probably has multiple roles and responsibilities. To remain productive, motivated and engaged, give them the best tools and training possible.

Use a credit line to invest in mentoring, education and training programs, as well as performance-based rewards, perks and incentives. This will help them do their job better, grow with the company and remain loyal to you as an employer. It also enhances your reputation and brand value, which makes it well worth the investment!

5. Upgrading Equipment

Paying a lump-sum amount for new equipment is rarely possible for a small business. In fact, even larger companies tend to put these purchases on credit rather than buying machines or supplies outright.

Despite the addition of interest, using a line of credit to pay for new equipment makes good business sense. It spreads out the cost of your purchase over a longer period of time, so your budgeting isn’t affected very much. It also allows you to get your hands on the upgraded machinery or equipment you need without unnecessary delays.

The most important thing to remember is that you should apply for a line of credit before you actually need it as good measure. You will not incur any interest as long as you don’t use it, but you won’t be struggling to get a loan – or compromising on essential business expenses – if you find yourself in a cash crunch!