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Letters Of Credit

If you have a major order, you can get suppliers on your side.

A letter of credit from a major customer can be used as a form of security in establishing relationships with suppliers. For instance, if you're starting a business manufacturing garden hoses, you could get a letter of credit from your biggest customer when the order is places, showing that the customer has contracted to buy the finished hoses. The material to make the hoses is then purchased using the letter of credit as security...and you don't have to put up a penny to buy the material.

Excerpted from Start Your Own Business: The Only Start-Up Book You'll Ever Need

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