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Diamond

Diamond Merchant Uses a Secured Line of Credit to Increase Profit Margin

Background

An entrepreneur owns and operates a company in New York that distributes diamonds to department stores. In the wholesale diamond industry, inventory costs are varied and unpredictable.

The Need

The owner needs working capital to take advantage of a spontaneous dip in diamond prices and build up inventory.

Small Business Loan Solution

After reviewing the business and personal financials of the entrepreneur, Biz2Credit recommended taking a line of credit against the strength of the business and personal credit of the owner. The owner could increase inventory without incurring interest payments if there was a lack of good product in the market. With a line of credit, the owner would only pay interest on the amount used. Biz2Credit surveyed various lending options and zoned in on two lending institutions. The owner received a line of credit at the prime rate.

Results

  • Received a line of credit of $250,000 within 20 days
  • Line was provided at Prime

Benefits

  • Additional working capital to take advantage of cheap inventory
  • Increased annual revenues by over $300,000

An entrepreneur owns and operates a company in New York that distributes diamonds to department stores. In the wholesale diamond industry, inventory costs are varied and unpredictable.