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    3 Replies Latest reply on Aug 21, 2016 7:43 AM by moderator_mel

    should I open a small business line of credit

    edcroninrcdd Newbie

      Want to add my first employee. Don't have cash on hand to do it. Does it make sense to open a business line of credit to pay for employee and all associated costs?

        • Re: should I open a small business line of credit
          Moderator Nancy Adventurer

          Hi edcroninrcdd,


          Welcome to our community!  We're glad that you have joined us and would love to hear more about your business!


          I'm sure one of our many community members will have some good advice for you.  In the meantime, you may want to read this article by Steve Strauss.  It contains good advice about getting a business loan



          • Re: should I open a small business line of credit
            GhostGuy Newbie

            HI Edcroninrcdd,


            Hiring employees is a major commitment to them as well as to your company.

            Ask yourself:

            1.  Is your business profitable?

            2.  Do you know that each employee will actually costs about 1.5 times their salary?

            3.  Will your employee(s) earn their keep, after their salary and costs?

            3.  Can you still make a living off your business after you make payroll?

            4.  Can you make payroll for at least 3 months if your business suddenly declines?

            5.  How will you manage employee taxes and benefits?  (And what will it cost?)


            If you do not have revenue, then your business cannot afford to hire employees and you certainly should not hire them!  You will be digging a deep hole of debt that are unlikely to recover from and will cause yourself, and your employees, much stress and sadness.

            Especially:  Do not go into debt to hire employees.


            ~ GhostGuy