How to Use a Business Line of Credit for Growth

A business line of credit is a great tool for small business owners who want to invest in growth opportunities but don’t want to take on more debt than necessary. A line of credit gives you the flexibility to borrow only what you need, when you need it, and you only pay interest on the amount you actually use. In this article, we’ll discuss how to use a business line of credit for growth.

‍

First, let’s review how a business line of credit works. A business line of credit is similar to a credit card in that you have a pre-approved borrowing limit that you can access as needed. The main difference is that with a line of credit, you typically get lower interest rates and longer repayment terms than you would with a credit card. And unlike a term loan, which provides you with a lump sum of cash that you have to repay over time, a line of credit gives you the flexibility to borrow only what you need, when you need it. You only pay interest on the amount that you actually use.

‍

Now that we’ve reviewed how a business line of credit works, let’s discuss how to use one for growth.

Here are three ways to use a business line of credit for growth:

1. Invest in marketing initiatives: A well-executed marketing campaign can help you attract new customers and grow your business. But marketing campaigns can be expensive, so using a business line of credit can give you the funds you need to invest in marketing initiatives without breaking the bank. Just be sure to develop a solid plan for repaying your loan so that your marketing efforts don’t end up costing more than they bring in.
2. Hire new employees: Expanding your team can help you meet increased demand and take your business to the next level. But hiring new employees comes at a cost—not just in terms of salary but also in terms of benefits and other overhead expenses. A business line of credit can help you cover those costs so that you can bring aboard the talent you need to grow your business. 
3. Make capital improvements: Investing in capital improvements—such as new equipment or renovations—can help improve efficiency and productivity, which can lead to increased profits. But those improvements come at a cost, so using a business line of credit can give you the funds you need upfront without putting strain on your operating budget. As with any other use of borrowed funds, be sure to develop a sound plan for repaying your loan so that the cost of the improvements doesn’t outweigh the benefits.

Bottom Line

You want to grow your business but don't want to take on more debt than necessary. A business line of credit can give you the funds you need to invest in growth opportunities without breaking the bank.

‍

When used wisely, a business line of credit can help fund marketing initiatives, hire new employees, or make capital improvements—all while giving you the flexibility to borrow only what you need and pay interest only on the amount that you actually use. So if your small business is ready to grow, consider applying for a business line of credit today!

‍

National Legacy Capital Group (NLCG) is a leading provider of working capital loans, business lines of credit and equipment finance. We work with businesses of all sizes to help them grow and achieve their goals. If you're looking for financing to help your business grow, call National Legacy today. We'd be happy to discuss your options and see how we can help.

‍