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Is it Worth Having a Line of Credit for An Online Business

by betterwtveter
4 replies
I am planning on purchasing an establish LLC that has been around for about 2 years with about a $20k line of credit. I will be creating a website and selling products for this company along with building a list of subscribers. I have been buying and selling companies for this past year, but never thought of creating a business line of credit for a company that sells a service of digital products.
Only reason why I see the business may need a line of credit is for a possible office building for employees in the future or to use the line of credit for advertising.
I just say it would be a good upsell for the business so when I sell this business to someone they will see the value of the line of credit as an opportunity to get additional funding for the business.

Any suggestions?
#business #credit #line #online #worth
  • Profile picture of the author HarrisonJ
    Yeah its great, but be very careful you don't spend 20k and end up with nothing. Build an email subscriber list that you can promote products to, or some kind of subscriber list like phone numbers or physical addresses you can market to. The customer list is the most important part of a business.
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    • Profile picture of the author betterwtveter
      Originally Posted by HarrisonJ View Post

      Yeah its great, but be very careful you don't spend 20k and end up with nothing. Build an email subscriber list that you can promote products to, or some kind of subscriber list like phone numbers or physical addresses you can market to. The customer list is the most important part of a business.
      No I have been working around business trade lines or lines of credit for a while. You can get an aged LLC with a 20k credit line for about $5k. You just need to do a bunch of searching, but they are out there.
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  • Profile picture of the author Farish
    Originally Posted by betterwtveter View Post

    I am planning on purchasing an establish LLC that has been around for about 2 years with about a $20k line of credit. I will be creating a website and selling products for this company along with building a list of subscribers. I have been buying and selling companies for this past year, but never thought of creating a business line of credit for a company that sells a service of digital products.
    Only reason why I see the business may need a line of credit is for a possible office building for employees in the future or to use the line of credit for advertising.
    I just say it would be a good upsell for the business so when I sell this business to someone they will see the value of the line of credit as an opportunity to get additional funding for the business.

    Any suggestions?
    You want that line of credit for cash flow flexibility. What if you have an emergency like server outage and or need equipment. You will be surprise how handy a line of credit can be.
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    • Profile picture of the author betterwtveter
      Originally Posted by Farish View Post

      You want that line of credit for cash flow flexibility. What if you have an emergency like server outage and or need equipment. You will be surprise how handy a line of credit can be.
      Totally true for emergencies, but it does take time to get the money available if you have such a situation unless you do put out a loan and put the money aside if needed.
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