For many people, owning a bakery is a labor of love, an opportunity to share their passion and prowess for baking cakes and other sweet goodies with customers who hopefully will become regulars. But don’t kid yourself—it takes a lot more than the ability to turn flour, sugar and other ingredients into craveable creations to operate a successful business. Bakeries, after all, fall under the highly competitive restaurant umbrella, so the recipe to prosper may not be as clearcut or straightforward as desired. However, if you have access to capital to help you overcome any business challenges, you could be on your way to baking yourself to success.
Why a business line of credit?
Like any business, it can take some time for a bakery to break even, let alone make a profit. But while you may experience growing pains, the bills still need to be paid, everything from rent and utilities to payroll and the ingredients you need for baking cakes and other bakery staples. The beauty of securing a business line of credit is that you will have funds available to you when you need them—up to the amount you’ve been approved for—but you will only pay interest on the money you actually use.
What other lending options may be available?
A business line of credit is just one way to borrow money to keep your business moving toward a time when it thrives and is showing a consistent profit. Other options that may be available to cake baking businesses are:
- Working capital loans—A loan for a specific amount that usually has terms between one and three years, making it perfect for addressing cash flow issues.
- Equipment financing—A loan to purchase the equipment necessary to operate the business, i.e., ovens, stand mixers, etc., where the equipment serves as the collateral.
- Merchant cash advances—A loan that may be appropriate if you do a large volume of credit card sales, because you are borrowing against future sales. Repayment occurs with the lender taking a percentage of each credit card transaction until the principal and interest are paid off.
Where can I learn more about business lines of credit?
Right here. Check out some of the other blog posts we’ve written about this product. And if you still have questions, we will be happy to provide answers for you after we learn about your specific situation.
What do I need to qualify?
Generally, you will need to have been in business for at least six months, have a credit score of at least 530 and have monthly revenue of at least $10,000 to be approved for a basic business line of credit from Clear Skies Capital. Other factors may come into play as well but meeting those three requirements will go a long way toward getting that “yes” you’ve been looking for.
The Takeaway
As the owner of a bakery, securing a business line of credit can be part of a great strategy to rise to success. Unlike traditional lenders like banks, whose application and approval process can be cumbersome and often end unsatisfactorily, alternative lenders are in your corner and focused on helping you make your business dreams come true.
If you have any questions about how to apply for a business line of credit, give Clear Skies Capital a call at 800-230-9822. You may be pleasantly surprised at what you qualify for