Online merchants inherently wear many hats each and every day. From having to manage inventory and track orders to growing new sales channels, there’s a lot to do!
Since the start of the recession in 2008, the media has drawn great attention to the diminishing number of banks offering loans to small businesses. This has deterred many business owners from even attempting to obtain funds to grow. However, establishing credit remains important, particularly if you have plans to ramp up your business. Here are just a few of the reasons why.
What will you do if you receive a larger than expected order? Will you have the funds necessary to buy the inventory you need or pay for the help you require to fulfill it? Having credit to get you through such a situation could literally make or break your business. Having credit on hand can give you peace of mind that you will have what it takes when you need it.
Protection against a Slowdown
Just as you need to be prepared for a sudden sales boost, you also need to be ready for when there’s a sales lull. Business credit can be used to keep you afloat through a slow period so that you’re still there when the economic picture improves.
The old adage that it takes money to make money still holds true. Having funds to use for taking advantage of a supplier’s sale or to be more aggressive with marketing initiatives can sometimes make all the difference to a business. By having the credit you need for promising business opportunities that present themselves, you can maximize your potential for success.
Vendors like to work with businesses that pay cash. In fact, many will offer discounts for doing so. If you are sourcing raw materials or even reselling goods, you’ll have more leverage with your vendors if you have cash on hand. This translates into savings for you and more cash in your pocket!
Providing a Safeguard in Case of a Business Failure
You can’t afford to risk your own personal credit. But, if you’re using personal credit cards to fund your business or are drawing from home equity or personal loans to do so, your credit can be damaged if your business fails. By using business credit when you need funds, you at least won’t have to worry about damaging your own personal credit.
Like with personal credit, you need to be proactive about obtaining and protecting your business credit. Credit can be an important component of your business’s future success, so it simply makes sense to find a partner for obtaining funds that you can count on. Kabbage has served tens of thousands of small businesses to get them the money needed to grow. 80% of businesses that apply get funding. To learn more about how Kabbage can help your business grow click here.