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How Credit May Help Your Business Grow
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Insights Magazine
Business Insights for Women
PNC INSIGHTS Magazine Spring/Summer 2014 Issue
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Instead of self-funding your expansion plans, consider bank financing to help reach your goals.

If you're among the many self-identified "debt averse" women in business who keep more than you need for everyday expenses in deposit accounts, now, while borrowing costs remain low, may be a great time to explore utilizing someone else's money to fund your company's next phase of growth. Here's a quick rundown of a few basic bank options available for short-, medium- and long-term credit. To figure out which product is right for you, consider how long you'll need the funds and how long it will take you to pay them back.

Long Term

When you have a project intended to change the long-term outlook of your business, then a business term loan may be in order. Capital expenses such as new equipment, real estate or geographic expansion will pay off for years to come, and your loan term should reflect that time frame. Term loans, usually secured by the property being purchased or some other collateral, typically feature fixed payments that help you budget your cash flow month to month. Many options exist, including SBA loans.

Medium Term

If your business experiences seasonal ups and downs, or if you take on large-scale projects that incur upfront expenses before you receive client payments, then a business line of credit, either secured or unsecured, may help you fill the gap. You can draw down the account up to your credit limit, and once you repay the principal - for example, when your client pays your invoice or during your busier season - it is available to you again for later use.

Short Term

To cover day-to-day expenses that fall within a month's time, consider a credit card. The great appeal of a credit card is convenience. It makes tracking expenses easier and allows you to cover all of them with a single monthly payment. You can also delegate payments by issuing cards to your employees for their daily business expenses. Many cards offer extra perks that can enhance their usefulness.

 


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