What is an emergency business loan?
Indeed, running a business is a roller coaster. As an entrepreneur, I have never met any successful business owner that has not encountered major setbacks.
In fact, I have my own personal story to tell. In 1999, I opened up my first financial services company as a limited partner. As a matter of fact from 1999 up until the great recession of 2008, the trend was upward. Despite of the upward financial trends and results, there were always financial challenges. In reality, financial service companies cannot access capital like a restaurant, a body shop, or a retail store. The finance industry is considered high risk. When I faced financial emergencies, I needed to turn to investors, credit cards, or sell more. This became even more challenging when the recession hit in 2008, 2009. I didn’t have financing options to turn to.
As a result, this became a great learning experience for me on how to manage cash flow, project for the future, and always work with business reserves. Today, the story is different. Lendinero, has been quite lucrative due to failures I experienced.
Lessons to Learn
What can you learn from these lesson? Sooner or later, every business owner will experience a financial setback. Without a doubt, one of the biggest mistakes business owners make is to seek financing at that time. An emergency loan can be a financing option you have, but that you don’t utilize. What type of financing is that? I believe a business line of credit is the best option to hedge against any future risk.
Understanding the value of a business line of credit
Why? First thing to remember is that a business line of credit does not require a fixed payment. You only pay for what you use. To illustrate, imagine if you are approved for a $100,000 dollar business line of credit and you only utilize $5,000. In summary, you have $95,000 available for use in the future when an emergency arises. Best of all, you don’t have to make a payment over the $95,000 because you have not withdrawn it. In other words, it’s like having $95,000 sitting in your bank account like a savings account. It will be there, when you need it.
Emergencies you will face
Last, I may remind you of some of the emergencies that arise. For instance, a piece of equipment breaks down and you need to replace it. Also, you loose your best customer or sales person. These are two basic examples. In working with over thousands of business owners during the last four years, I have over fifty case scenarios I can share with you. Don’t wait for a bad day to happen and seek a loan at that time. In conclusion, have financing tools available to you just in case you need it.
Founder of Lendinero