I spoke with an entrepreneur yesterday whose business is growing 50% this year, and her b2b sales have grown from 10% to 30%. For the first time, cash flow is becoming an issue.
She was almost embarrassed. "I have grown my business without taking on any debt, and I don't want to now." I encouraged her to take a deep breath and that a line of credit is often a part of the furniture of a business. You just need it, and it's not evil.
Her business has high margins. But you can't catch up when it takes 60 days to get paid, and you have to pay your employees. And then the tension of not making payroll can spiral many other things out of control.
I like to see lines of credit at greater than 10% of top-line sales, or 85% of A/R and 50% of inventory. If you are not close to these parameters, jump on this as an essential issue.