So, you have an event planning business and you are thinking of ways to sustain, thrive and grow your business. You may have thought of a strategy to promote your business or establish a client base, but without cash, your strategy may not see the light of the day.
Lack of funds shouldn’t be a roadblock in your success story; a line of credit is an affordable and convenient source of capital and it has become a very common tool for small business owners.
A personal line of credit is typically used for short-term working capital. It helps improve cash flow and also meet the costs of unexpected expenses.
A small line of credit allows you to draw the money you need up to a predetermined limit. Unlike a business loan, the beauty of a credit line is in its flexibility – You can use the funds for any financial needs you come across in your business. The biggest advantage of the line of credit is that you only pay interest only on the funds you withdraw and not on the entire approved credit limit.
Here’s a list of situations you can use a personal line of credit for your event planning business:
Situation #1 Step up your marketing game
You find your business not growing as expected. You realize that you need to invest in marketing your services. You decide on revamping your website to make a strong online presence and attract leads. You need funds to hire a good website designer.
Use how much you need from your personal line of credit and step up your marketing game.
Situation #2 Expand your team
You’ve been successful in creating a lot of hype around your event planning business. You start to generate leads and attract bookings. But, you realize you need more resources to stay on top of things. So, you decide to expand your team.
Meet this financial need with the help of a personal line of credit; withdraw as much as you need up to your credit limit and pay interest only on the amount used.
Situation #3 Can’t afford to miss a business opportunity
You have been lucky to get the opportunity to put up an event that has the potential to change your business forever for the better. But you don’t have enough capital to cover the expenses of the event. And your clients pay you back 60 days after the event.
The line of credit can cover the expenses of the event. Repay the amount you used as soon as you receive the payment from the client.
Situation #4 Hire celebrities or emcee
You need to get a celebrity or a good emcee to make a difference to the overall quality of an event. But, they come at a huge cost. And you don’t have the money to spend on such a big expense.
A personal line of credit is a great way to get access to cash which can be put into your business immediately.
Situation #5 Hiring service providers
To organize any event, it is mandatory for you to have a network of good quality service providers like fabricators, decorators, sound & light technicians, etc.
When you can’t afford good quality vendors, a line of credit helps you up your game by not allowing you to compromise on the quality of the service.
Features and Benefits of a Personal Line of Credit
You pay interest only on the amount you withdraw from the line of credit. If no usage, no interest payable. A line of credit gives you flexibility and also helps you save money if you’re not going to use your full credit limit.
Unlike a business loan, a personal line of credit once established stays with you for life. You don’t need to reapply for it again. As you pay the amount you use from the credit line, you have more amount to use in future.
You get to pick a repayment tenure that fits with your business’s budget. You get to choose a shorter loan tenure if you have the financial capability to repay the loan quickly. Or you can opt for a longer loan tenure if you want to stretch the payments over a period of years without stressing your cash flow.
If you are an event organizer and looking for sponsors for your event, list your event on Onspon and apply to sponsors.
Shiv Nanda is a financial analyst who currently lives in Bangalore and works with MoneyTap, India's first app-based credit-line. Shiv is a true finance geek, and his friends love that. They always rely on him for advice on their investment choices, budgeting skills, personal financial matters and when they want to get a loan. He has made it his life's mission to help and educate people on various financial topics, so email him your questions at [email protected]
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