You are to assume the role of a small business advisor. A small business owner has asked for information about the benefits and risks of opening a business line of credit and other forms of financial assistance.
You are meeting with the owner of Bounce Mania, a business that rents inflatable bounce houses. Currently, Bounce Mania owns four large inflatable bounce houses of different themes and four large air blowers that keep the bounce houses inflated.
Bounce Mania has been in business for two years and is doing well. All four inflatable bounce houses are booked every weekend for the foreseeable future, which is fantastic; however, customers who have been turned away from renting due to unavailability are instead turning to competitors in the area for bounce house rentals.
The owner is meeting with you to learn more about opening a business line of credit. The owner wants to purchase additional bounce houses and air blowers and possibly hire additional staff. The owner wants to have a line of credit to help with ongoing operating costs, as well.
The owner has asked you to explain:
- Purpose and importance of obtaining business credit
- Risks associated with obtaining business credit
- Other sources of financial assistance
- A business’s financial needs at different stages of development
- How obtaining additional inventory could affect price of rentals
- How obtaining additional inventory would affect competition
