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Maybe You Need a Loan
by Bill Collier

Many entrepreneurs tell me some variation of the following:

"At our current size, we can't generate enough revenue and gross profits to cover expenses and be profitable. I need to hire help, but cash flow won't support the additional expense. So, I feel stuck. I can't stay where I am and I can't grow. What should I do?"

The answer may be: Go get a bank line of credit.

Most small business owners try to avoid debt, with good reason. Of course most of us would prefer to grow "organically," and keep our balance sheets squeaky clean. But that's not always possible.

By the way, the kind of loan I'm talking about here is a bank line - also called a working capital line of credit - not a long-term installment note. Your line's balance goes up and down with cash flow. When cash is good, you pay down some or all of the line. When cash is needed, you draw from the line. We're talking about a tool used to even out cash flow.

When you need to purchase fixed assets (vehicles, computers, equipment, etc.) or make other high-dollar investments like facility improvements, that's when a term note or even a lease might be appropriate.

By using a combination of a credit line to help with your daily operational cash needs, and financing or leasing for your more expensive purchases, you can get over the cash flow hump and be on your way to growth and success. Proactively plan for your needs in advance, rather than when you're in cash distress. Use borrowing sparingly and wisely to fund and fuel your growth.

Just remember ... you've got to pay the money back, even if your growth plans don't work out.

Bill Collier is a St. Louis-based business coach, consultant and speaker. He is the author of the book “How to Succeed as a Small Business Owner … and Still Have a Life.” His website is, and his email is



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