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Most business ventures are not profitable during the first year or two. But the proper use of business credit can help you survive to profitability.

There are many ways you can repay business loans:

**Out of your cash flow.

When your business earns more than your business expenses you will have free cash flow to repay debts. This can take 1 to 3 years depending on your type of business.

**From the sale of an asset.

Investing in real estate basically means holding a property at break-even or at a loss until you sell it for a profit in the future. Huge fortunes have been made with this kind of buy and hold investing if you find good deals and add value to the property.

If your property happens to throw off extra cash flow each month, that is a nice bonus, but is not mandatory to succeed.

**By selling the entire business or investment.

You can spend a year building up a business and then sell it for a huge profit. Many investor’s want to buy your business if it is already running profitably for a multiple of many times the annual profit.

Some people just build and flip business for profit!

**Setting money aside from your fist line of credit.

This is one of the best ways to use business credit to start your business.

I call this using the 80/20 principal.

Make a written plan for how much money you will need to start your business and run it for the first year.

Then apply for about double that amount in business credit.

But only spend about 80% of the available cash on your business and set the remaining 20% cash aside in a business checking account.

That is called seasoning money or saving for a rainy day.

You can then use that money to make the monthly payments when they come due on your line of credit that you have in use for your business start-up.

The monthly payments tend to be very small and this seasoned money could last you for years.

And it is always important to have a written plan and to know exactly how and when your start-up business will become profitable. When it does, you can repay all the business loans you are using.

Although most large companies constantly use some business credit because it is the cheapest money you can find!

Posted by John Zelko, Minnesota
Hi Tom, I want to sincerely “THANK YOU” for developing a system for all the entrepreneurs of the world. A “Business without capital” is like a “fish out of water”. Anxiously awaiting the arrival of your course as I have been a follower of yours for the last 3 years or more.