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Cash Solutions From Your Bank

Many banks offer credit to cover account overdrafts, giving businesses a flexible way to fill short-term funding needs.

This story appears in the October 2005 issue of Entrepreneur. Subscribe »

When Indianapolis entrepreneur Joe Traynor launched his commercial real estate appraisal business, Traynor & Associates Inc., seven years ago, he saw no need for a formal financing plan. "Initially, I didn't worry about a line of credit because I was a one-man operation. I could skip paying myself if I had to," recalls Traynor, 49.

He did, however, take steps to protect himself from the periodic cash crunches that plague up-and-coming businesses. Traynor obtained an overdraft line of credit, which kicks in when a business makes payments that exceed the available cash balance in an account. "There were times I had a payment that had to be made but didn't have money in the checking account to cover it," he remembers.

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