PART OF GROWING THE BUSINESS IS INCREASING AVAILABLE CREDIT
How Boost TV Secured a $250,000 Business Credit Card and the Benefits of a Large Line of Credit for Business Expansion
In the competitive landscape of media and entertainment, securing substantial financing can be pivotal for growth and sustainability. Boost TV, a rising digital broadcasting company, demonstrated strategic financial planning and sound credit management to secure a $250,000 business credit card. This financial boost not only provided immediate liquidity but also positioned Boost TV for future expansion. We are sharing with you our process behind securing this substantial credit line and delves into the advantages that a large line of credit can offer a business aiming to grow.
How Boost TV Secured a $250,000 Business Credit Card
1. Preparation and Creditworthiness Assessment
Before applying for a business credit line, Boost TV’s management conducted an internal review of their financial health. This included analyzing cash flow, revenue streams, existing debts, and credit scores. Demonstrating strong financial stability and a solid business plan helped boost credibility.
Additionally, Boost TV ensured their business credit report reflected positive payment histories and minimal defaults. A good credit score (typically 650 and above for most lenders) is essential in negotiating favorable credit terms. This is when we partnered with Better Qualified. They ran our business credit and advised us on some minor tweaks to raise our score to the highest score possible. Each credit point equates to $1,000 in approvable credit line.
2. Choosing the Right Financial Institution
Boost TV’s executives researched various financial institutions, including traditional banks, credit unions, and online lenders. They prioritized institutions offering substantial credit lines, flexible repayment terms, and competitive interest rates. Paul Oster at Better Qualified has not only been in the credit business for years, but also has appeared on several major TV networks to provide expert insight into credit and the impact it has on all financial decisions.
3. Approval and Utilization
Once approved, Boost TV received the credit card with a $250,000 limit. This line of credit could be drawn upon for equipment purchases, content production, marketing campaigns, or operational expenses.
Regular management of the account, timely repayments, and maintaining good credit standing ensured continued access and potential increases in credit limit over time.
The Benefits of a Large Line of Credit for Business Expansion
Having a significant line of credit provides numerous advantages to a growing business. Here are some of the key benefits:
1. Flexibility in Managing Cash Flow
A large line of credit acts as a financial buffer, helping smooth out seasonal fluctuations in revenue. For Boost TV, this meant being able to fund content acquisition, technology upgrades, and staffing during periods of cash flow variability without disrupting operations.
2. Access to Capital for Growth Opportunities
Businesses can act swiftly when opportunities arise, such as acquiring new broadcasting equipment or launching new channels. A substantial credit line ensures funds are readily available, reducing delays caused by funding shortages.
3. Enhanced Purchasing Power
With a larger credit limit, Boost TV could negotiate better deals with vendors, buy in bulk, or invest in premium content—actions that might be constrained by lower credit limits.
4. Building Business Credit and Reputation
Consistent use and timely repayment of a large credit line can positively impact a company’s credit score, making it easier and cheaper to secure additional financing in the future.
5. Supporting Strategic Business Initiatives
Expansion plans, such as entering new markets or developing technological infrastructure, require significant capital. A sizeable credit line enables the business to fund such initiatives without diverting internal resources or seeking outside investors prematurely.
6. Emergency Preparedness
Unforeseen events like equipment breakdowns, legal issues, or market downturns require immediate funding. Holding a large line of credit makes a business more resilient by providing quick access to emergency funds.
7. Facilitating Cash Flow Cycles During Growth
Revenue growth often comes with increased expenses. A large line of credit helps sustain operations during periods where incoming cash flow temporarily lags behind expenditure, ensuring continuous service delivery.
Practical Considerations for Maintaining a Large Line of Credit
To maximize benefits, businesses should:
Use the credit line strategically, focusing on investments
Use the credit line responsibly, avoiding excessive debt.
Maintain a good credit standing through timely payments.
Regularly review and adjust credit limits in consultation with lenders.
Have a clear repayment plan aligned with revenue projections.
