line of credit

[cjm2783]

just wondering how many of you guys have a line of credit or do you just use a credit card to make purchases.
i just got approved for a line of credit for 10k, mainly to buy materials. i got a interest rate or 4.5 on the money that's actually used out of the 10k.

cjm

[Mike J]

If I can't pay cash I don't need it. As far as materials for a job, if it is a big job there is a deposit.

[Elwood]

A line of credit is fine, but interest is NOT your friend. Make payback quick to avoid higher interest costs. If you borrowed money at 4.5%, you did alright.

[Blake]

I have a line of credit & it sure has been a handy tool. As for the interest, when your LOC allows you to pay a bill before they tack on a late fee that's interest well spent.

[MOWANDGO]

If you can take out a line of credit at a low interest rate, do it so long as your ROI exceeds the interest your paying on your loans. I mean there isn't really any point in pulling money out of investments you've already made in order to finance your business so long as they are making a better return than your paying out.

[jgc8fan]

I use credit cards, but it's all the same... The trick is that you have to REMEMBER to pay back the materials cost as soon as your customer pays. Just letting it slide is what get's you in trouble, but if you pay it right back then interest shouldn't even be a concern as you wouldn't accrue any.

[MASTERMOWER]

I require a 50% non-refundable deposit (refunded only for a very legit excuse)on any landscaping job over $1000. Usually this is enough to buy all supplies, if not the remainder goes onto a credit card, paid off once project payment is received.

[btammo]

Line of Credit is a great tool to have, especially at the low interest rates. Credit cards are too high and conventional business loans are also high. Use your line of credit and make sure you keep good records of payments and purchases for tax. The interest is tax deductable.

[CCLS]

A line of credit is a necessity for large or growing companies. If you have a huge job that requires a lot of material, you don't want to spend all of your cash to do the job. Credit lines help get you though the slow times till you get to the good times. Watch your interest rate and remember that intest is not your worst enemy if you use it sparingly. You can always write off your interest. Credit cards are a death trap if you let the balance go out for months and months.

[cjm2783]

A line of credit is a necessity for large or growing companies. If you have a huge job that requires a lot of material, you don't want to spend all of your cash to do the job. Credit lines help get you though the slow times till you get to the good times. Watch your interest rate and remember that intest is not your worst enemy if you use it sparingly. You can always write off your interest. Credit cards are a death trap if you let the balance go out for months and months.

You said a mouth full there. If you are growing and have 5-8 jobs going on at once you have to have a line a credit. I was at the point where i was in my savings trying to pay for materials with all these jobs. And you're right, interest in way too high on credit cards.

cjm

[Bulldog26]

Are you guys talking about a credit line on you home or just go to a bank and getting an open credit line for a business? Just any of the local banks or credit unions?
bt

[cjm2783]

it's just like a credit card, but the interest is really low or at least i got a 4.5%. i didnt have to barrow against anything, but if someone has a low credit score you might have to get a co-signer or barrow against something.
it's pretty simple, i have 10k, i dont pay anything if i dont use it and i only pay interest on the money that i use. it's just good to pay for materials ans good for emergency so i dont touch my savings.
cjm

[Bulldog26]

In most cases I would never borrow money for business. But I'm starting my second year and I need to hire someone to help out with the growing load of work. (good problem to have) This might solve my concerns of covering the cost of an employee to start the year. Would you go to a bank or credit union?
bt

[CCLS]

Usually the higher your credit score is, the higher line of credit you can receive. I am set up on a interst only line, which means my minimum payment is the interest I incurred during the month. This really helps because if the job is 60 or 90 days out, I don't have to worry about getting the cash back to the bank right away.

[jrservices]

Usually the higher your credit score is, the higher line of credit you can receive. I am set up on a interst only line, which means my minimum payment is the interest I incurred during the month. This really helps because if the job is 60 or 90 days out, I don't have to worry about getting the cash back to the bank right away.

My line of credit is set up pretty much the same as yours is. It has been very handy. It helps when your credit is in good shape.