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Business Loan vs Credit Line for seasonal stock

Lord TSC · 2019-10-21 11:15:33

I'm a lone trader of a small toy business. And since Xmas is coming, I'm weighing up getting a little bit of help from the banks to have a bit of aggressive expansion this winter. Xmas is always my busiest time of the year; typically, I'll do as much in the next two months as I do the rest of the year round. As such, I was…

21-10-2019 11:15am

#1

Lord TSC

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I'm a lone trader of a small toy business. And since Xmas is coming, I'm weighing up getting a little bit of help from the banks to have a bit of aggressive expansion this winter.

Xmas is always my busiest time of the year; typically, I'll do as much in the next two months as I do the rest of the year round.

As such, I was considering taking a small business loan out. AIB have been getting in touch about the fact the option is there, and I was considering taking out a €5000 loan. AIB say there's no charges on early repayments of their SME loans, and I'd be fairly confident I could repay the vast majority of that loan back the week after Xmas.

But when I rang up to confirm that about early repayments, they mentioned to me that it might be better for me to apply for a "Credit Line" account instead. The woman said that some people prefer having a weekly or monthly bill they can keep on top of for their files, but that Credit Lines can be beneficial in other ways.

I'm trying to read up on it now, but is the idea that basically they create a little account with some money in it, and I can take what I need when I need it, and then repay it back into that account when I can? Meaning when I don't need the money (say in quieter months), I can just leave the credit account sitting there without having to worry about repayments?

Would the credit line make more sense for someone wanting to expand their stock over Xmas, over a loan? Has anyone any experience on that?

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