Holidays. It can be a great time of year to get the family together.
However, it is also an expensive time of year for consumers and businesses alike. Altogether, Americans spend over $1 trillion during the holiday season.
With such high demand during this time of year, businesses need to ensure they have the supplies to keep up. How do they do this?
Funding inventory purchases is the most important way to ensure a successful holiday season. How do you make sure you have the inventory funding?
These are a few tips that can help you.
1. Company Credit Card
One way to ensure you have the funding for your holiday supplies is to get a company credit card. This will allow you to buy everything you need now and pay it off later.
Depending on your credit score, you could give yourself access to the ones that offer the best deals. According to Experian, a very good credit score is over 740 but less than 800. An excellent credit score is anything above 800.
Consider going this route for your business. Remember only to make essential purchases because credit cards have the highest interest rates if you cannot pay your balance off in time.
2. Line of Credit
Another way that you can make sure you have inventory financing for the holiday season is by opening a line of credit. This works slightly differently than a credit card in that you are taking this line of credit directly from the bank.
This can be a great option for those looking for a flexible financing option. Essentially, depending on your qualifications, this leaves you open to the possibility of adjusting your credit line.
Let’s say that you needed an extra $10,000 for holiday supplies. You can quickly access that money and get the necessary supplies with a line of credit.
However, just remember to keep up with your balance to avoid additional interest or penalties.
3. Small Business Loan
Finally, an alternative that you have is to take a small business loan. Unlike a line of credit, you are signing up to receive a specific amount of money here.
The one good thing here is that compared to the other two options above, you are likely to have a lower interest rate with a small business loan. However, the one thing you must watch out for here is that lenders may suddenly raise interest rates due to inflation.
Start Funding Inventory Purchases
These are three ways you can start funding inventory purchases for your upcoming holiday season. You can open a company credit card, take out a line of credit, and even take out a small business loan.
No matter what option you choose, make sure you devise a plan to pay off your balance as you manage your overall cash flow.
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