Credit has come to be something that business owners look at with a sceptical eye. Many of us prefer a traditional approach to controlling our professional finances and will avoid spending money that we don’t have at all costs. But every now and then certain situations arise where credit could be extremely beneficial for your company. Here are a few situations where you might want to consider applying for credit and using it to your advantage.
Making the Most of Offers and Sales
Chances are that you use the same stockist or wholesaler for the raw materials that your company uses. Whether you specialise in clothing and customise plain wholesale tees and tote bags, or sell edible arrangements and source your ingredients from fruit wholesalers, there’s bound to be someone who you go to for the main components for your products. Every now and then these companies are likely to let large amounts of stock go at a much lower price than usual. They may be trying to clear out warehouse space, old stock ahead of the launch of new stock, or they might simply be having a sale. You want to capitalise on these kinds of situations, getting as much cheap stock in as you need to tide you over. But sometimes you won’t have enough cash on hand to make the most of flash sales. Nothing is more frustrating than having to fork out the standard price for a product knowing that it was on sale just a few days before. It’s situations like this when credit can be used to your advantage. If you have credit of some sort you can use this, then pay back the amount in full a few days down the line when it becomes available. Just remember to try to always make repayments in full, as this will help you to avoid hefty interest costs mounting up. If this sounds like something that you want to have ready and at hand for the future, apply for a credit card and ensure that the lender knows you intend to use it for business purposes. They may be able to offer you preferable interest rates, higher credit limits or other perks if they know that it will be used for large sums.
Sometimes you’ll notice that sales lull. Chances are that your brand no longer has the appeal that it used to. Consumers quickly become tired and want to see something new before they’re willing to part with their cash. This is where rebranding comes into play. You can rebrand your company, making it exciting and fresh again! When doing this, you’re likely to have low funds so credit can give you sufficient means to successfully rebrand your business and start profits rolling in again.
As you can see, credit can prove extremely profitable if used in the right way. Just remember to never take out a loan or credit on something that you are unlikely to be able to pay back. Always make sure to make repayments on time too. This will help you to avoid fees and fines which could prove troublesome in the future.