Small Business Cents

[#1]

Businesses that run through operating cycles, on and off seasons in the summer or winter for example, may find from time to time that a loan is needed to keep up normal operation until the positive flow season hits.  Business owners looking to obtain small amount of funds for working capital to help operate their business should consider getting a business line of credit loan. 

What is a Business Line of Credit?

A business line of credit loan helps small businesses grow and operate.  This type of loan is designed to finance short-term working capital needs, such as inventory purchases or to pay operating expenses.  These loans are given by financial institutions to operating businesses that meet certain criteria.

To receive a line of credit loan, profitable operating businesses must demonstrate a positive cash flow.  The amount of the loan depends on your business revenue performance.  The financial institution will look at revenue and cash flow-past, present and future-to determine the maximum line of credit your business will be allowed to borrow.  These records will help the business owner prove that the loan debt can be repaid during the term of the loan.  Similar to the concept of credit cards, owners are approved for a maximum amount for lines of credit loans, and then they are allowed continuous borrowing and repaying during the term of the loan.  For this matter the loan is also called revolving line of credit.

When to Use a Business Line of Credit?

This type of program is appropriate for businesses that have seasonal operating expenses or variable working capital demands.  In other words, normal operating expenses that your business is able to cover during a regular business cycle. For example, you would use this type of loan to purchase supplies and inventory.  A line of credit loan allows the owner to borrow the money needed to help meet the demand.  You would not use this type of loan for large long term investments such as buying property, new equipment, or fixed assets.

SBA Loans and the Recovery Act

According to the U.S, Small Business Administration, "Lines of credit approved on or after March 16, 2009, via Patriot Express or the CAPLines program are eligible for up to a 90% guaranty. Lines of credit approved on or after February 17, 2009, via SBA Express are not eligible for more than a 50% guaranty, but qualify for fee eliminations if the maturity is longer than 12 months."

[#2]

Zaneta, your article is very informative and insightful.

There is a credit facility that is available to small business owners that is not commonly known or commonly used.  It is Invoice Factoring.  It is off-balance-sheet financing so it does not add burden to the financial statement.  It is not based on the business owners credit, but on the credit-worthiness of his/her customers.

It expands with the business as it is tied to the sales revenue. 

If the business owner has good sales, but income is locked up in receivables, Invoice Factoring is a way to unlock cash that are tied up receivables.

It is a facility that can be used by start-ups as well as established businesses.

Readers who are in a "cash-crunch" now due to the economic down turn can often benefit from Invoice Factoring.

[#3]

Im looking to obtain government contract and funding on a state of the art publically toured exotic animal facility.

There is a very high demand and need for Primate facilities in the USA As the low number of Sanctuaries are full to capacity and the federal government have ownership over several primates in facilities.

When they retire they have no place to go to fullfill their future lives.Usually become euthanized or placed into extended testing then euthanized.

The Exhibit would act as a safe haven home for the life of the Exotic animals and be a for profit organization.We would accept animals from the zoos,pet trade as pets,medical research labs,entertainment industry etc.

We would accept Contributions,donations,will of estates,charges for estimated lifetime care of animals on relinquished animals from the public,research facilities as well as spay neuter contract and transportation costs to be covered by relinquishing party. as well as educational tours for school children and professional guided tours for corporate and individual groups etc.

We have several ways of making revenue once were established and in place on a piece of land and have buildings and housing in tact..

I have a business plan in tact,blueprints written and everything ready to go but the funding and security to get started.  Im Currently working with Exotic Parrots and Primates in my area. you may view a bit about what we do as a non profit at http://USPrimateRescue.webs.com 

We have our EIN number and have an attorney applying for non profit 501c3 status and incorporation in what were doing for the meantime until funding is available or contributions for phase 1 of the Exhibit begin.At that point we will go for profit and close the non profit status or donate the animals to the new facilty.This has been an all out of pocket expense and we have yet to receive any contributions to date.Any information on how to get to the right sources to apply for the financing we need or to contract bids on primates the government own please send me information to my email or directly to site contacts. thanks for readuing my venture and i highly appreciate everyones goals in life.

Message Edited by NicoleD on 09-30-2009 12:45 PM

[#4]

As noted above, to receive a line of credit or loan, businesses must demonstrate a positive cash flow.  The amount of the loan or line of credit depends on your business revenue performance.  This site provides many free online calculators including a http://www.calculatorplus.com/business/cash_flow.html business cash flow calculator as well as many other http://www.calculatorplus.com/ loan calculators useful for determining whether you can qualify for a loan.

Message Edited by NicoleD on 06-22-2009 11:18 AM

[#5]

Right now it is so difficult to get a business line of credit if you are a small business or a retail shop. Most of the banks that were supposed to provide loans are tightening due to the credit crunch yet I continue to hear that banks are lending to small businesses. Yes, if you are a credit card processing company with lots of money leaving from one bank to another, perhaps you can do so. But for the most part, if you need start up capital, you will have a hard time with the bank as they are looking to give those lines of credit to establish businesses with 3 months of banking and processing statements.

Message Edited by NicoleD on 06-26-2009 01:23 PM

[#6]

A business line of credit loan strongly helps small businesses grow, develop and operate.  It is designed to finance short-term working capital needs (inventory purchases or to pay operating expenses).

[#7]

A business line of credit loan strongly helps small businesses grow, develop and operate.  It is designed to finance short-term working capital needs (inventory purchases or to pay operating expenses). What would I like to add to this statement? This topic is very interesting for essay writing in business schools and colleges. As for me, I have already selected "Business Line of Credit" as my favorite issue to discuss about.

Message Edited by NicoleD on 07-05-2009 04:50 PM

[#8]

Such type of Loan can be very helpful indeed when your business is in real problem, however the interest rate is what makes me worry. I guess this is a worry for all business owners thinking about such loan.

Message Edited by JamieD on 08-26-2009 10:49 AM

[#9]

There is a very high demand and need for Primate facilities in the USA As the low number of Sanctuaries are full to capacity and the federal government have ownership over several primates in facilities. 

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Message Edited by NicoleD on 09-04-2009 02:53 PM

[#10]

Great job and good information here.

Regards,

Michael Guilfoyle

Windows Hosting at M6.net

Message Edited by ZanetaB on 10-07-2009 11:59 AM

[#11]

Very interesting read! Some very good points mentioned, thanks.

Message Edited by ZanetaB on 10-12-2009 10:21 AM