Question: As a small business owner, how can I effectively manage my business credit in today's tough economic times?
Answer: A business revolving line of credit or similar credit facility can be a useful tool for your growing business by providing ready financing for business expenses. In the current credit environment, however, it is important to manage this resource appropriately to ensure that the credit continues to be available to you.
In order to properly manage your credit, know what is required of you. Provide necessary reports or other documents to you lender within the timeframes required by your loan documents and comply with loan covenants. Repay any amounts borrowed in a timely manner and demonstrate the capacity to manage the credit granted to you. Perhaps most importantly, keep lines of communication with your lending institution open.
Consulting with legal counsel when structuring your business, obtaining a new business credit facility, or evaluating any existing credit arrangement can help you plan how to best manage your business credit. Appropriate legal counsel will help facilitate the proper use of your credit facilities in order to continue the successful operation of your business.As originally printed in the Journal of Business - Spokane, in February 2010. Business & Corporate Law
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