How Business Lines of Credit are better than Bootstrapping (Self-Funding)?
• Most people can’t afford to build an entire business on their savings. Businesses are very expensive to start, with all the new taxes, the state and federal fees, not to mention office space, employees, and insurance! Unless you are sitting on $300,000 in cash, you NEED money from somewhere else. Then the only decision is where to get it from. • Funding a business with your savings is too risky. What happens if a great business concept gets hit with unforeseen market conditions? What if you built the perfect new restaurant and finished it 1 week before Hurricane Katrina hit? Business lines of credit leave that risk with the banks, who understand how to balance their budgets so that something like that won’t wipe them out. You don’t have the resources of a big bank, who has the government to help them in a pinch, so let them help you instead. It is much safer.
