I do the same thing with credit cards and inventory; not anywhere near 35000 a month though. I do not think they care that you are financing inventory on the cards. When I got the Chase Ink Classic in June they were offering twelve months of zero interest. I do not see any other purpose for that unless it is to buy inventory, equipment, or other expenses and enjoy the float time. With American Express, I have charged up to the limit and am letting it sit there until the zero interest runs out. If they close the account I really do not care so I am in no rush to pay it off.
Lines of credit are not free and they charge interest. A credit card is zero interest, free, and is very easily used. The two year thing may not be set in stone. I was told the same thing by a credit analyst when I applied for the Ink Classic. Two days later I rang again and she did not care that the business was only a few days old.
Also, Chase has never asked for profits when I ask for an increase; the only thing they care about is sales. If you buy 5000 of inventory, they want you to have at least 5000 in sales. It does not really matter if you made 100 or 10000 from the sales.
Credit cards, in my opinion, are the best way to start a business. I made sure I had enough money to start, but with the cards it is really nice to let the money sit and earn some interest before paying them off. The 250 bonus from Chase was also nice since I was going to spend 5000 anyway. Loans also charge interest right away so if possible I think a credit card is better.
omg I was thinking of you all day i swear.... I am on this forum every single day for hours yes I am addicted...lol I remember a while back reading your thread and was like wow chase is good, I forgot your handle to search that post..... I also hope they reinstate me, it will help alot...
Guys we do have credit with all our vendors my family has been in business for over 20 years in the US.... problems now is that most vendors are also stressed for cash. Before we would get 500k inventory and were told dw pay us in 6-8 months no problem... Now those same people are telling us pay half up front then we will give it to you. They are getting burned by too many people. Problem is our invoices are 50-60k each. Garments are expensive, and then on top of that we are paying for some goods upfront because they are new venodors and dont have a history with them. This new location for us good willing has been very lucky suprassed all records for the past 10 years honestly.... it makes sale and profit trust me....
You might have to use your profits from your current inventory to pay your bills and purchase new inventory. small businesses are built with time, you need to establish yourself and your clintel over time, you can't expect it to happen over night.
once you establish yourself banks will be willing to work with you
Yes, trust me that is our intentions and honestly by Nov most of our vendors I would say 80% are paid off and that allows us to keep most of Dec sale as profit...
Anybody can run a successful business. Its the times like you are having that separates the entrepreneur from everyone else.
I'm going to be making some assumptions and as I do this please feel free to correct me if I am wrong.
You need about 50K a month in working capital?
You will have to work several avenues at once. Time is your enemy. This will keep you busy.
Do you have any personal savings, 401K or life insurance where you could borrow some or all of this money?
Do you own any property that you could borrow against?
Could you sell your Rolex watch or other bling?
What kind of car do you drive and what are the monthly payments? Can you sell it and get a beater for a while? (Saves insurance also!)
Do you have a second car, jetski or other toys you could sell?
You see where I'm going with this? The more money you can come up with the less you will need to find elsewhere.
You need to take a pay cut NOW! Cut to the bone! If the business fails you definitely won't be making 123K a year next year. What's your highest paid employee make? That sounds like the proper amount of your new salary. I know this will hurt and hurt bad but it is necessary. Every week that you go with a lower salary will be more money you can pump back into your working capital. Think of it this way, if your salary went to 65K you would have all the money you would need in a year just from that. You can always take a bonus later if/when you turn things around.
Don't count on the banks helping you. If Chase doesn't I wouldn't even consider going to another bank, it would be a waste of time. Imagine what they would think opening your credit reports and finding out Chase closed all your accounts. I would suggest that you try re-opening your cards even with smaller CL if possible. Be nice and courteous no matter what the outcome. Don't let on that your business will be in trouble without those cards. They might think you will fail and close your merchant accounts also.
Don't keep telling everyone about this! Bad news travels fast! Those vendors that give you terms now won't if they find out!
Don't order any more merchandise unless you know how you will be paying for it! That is a really quick way to sink the ship.
How many employees do you have? You need to cut staff to the bone! You can work extra to take up the slack. (You won't have any money to be doing anything else anyway!)
What does your brother have to say about this? Can he chip in any money?
webhopper and jamie123 both have great ideas that you need to look into. This stuff will give you a way to be able to rely on what you have instead of doing by credit.
He retired and lives happily oversees, he has many investments there. He cant send us cash cus the economy oversees runs differently trust me...
Chase will lose me big time trust me, right now its not alot only 30k of unsecured credit. Im not trying to boost or talk crap at all, but my grandfathers and dads investments helped us alot so im not worried about future, i know im set and my kids and there kids also...lol
my borther and I are doing this on our own, he told us forget owning a business but its in our blood and we love it... Problem is that this happenes to us every year we invest almost every dollar before Dec in inventory and they are fine after christmas... Last year I swear we only had $500 in our checking account early nov, and almost 600k inventory, too bad you cant eat inventory, rather than food...lol after dec we had 200k in cash in the bank no problem..... But since we are seasonal we usually spend most on new invenotry and to stay affloat when we are off season....
I honestly only needed the credit until nov, by them we are in a big cash flow and will have no problems.. if this happened in nov I would just laugh it off....problem is I need about 30-50k each month for the next 3 months... Chase just wiped out 30k thats huge right now.....