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 formof security in establishing relationships with suppliers. Forinstance, if you're starting a business manufacturing gardenhoses, you could get a letter of credit from your biggest customerwhen the order is places, showing that the customer has contractedto buy the finished hoses. The material to make the hoses is thenpurchased using the letter of credit as security...and youdon't have to put up a penny to buy the material.
Excerpted from Start Your Own Business: The Only Start-Up BookYou'll Ever Need
Entrepreneur Editors' Picks
-
This Co-Founder Was Kicked Out of Retailers for Pitching a 'Taboo' Beauty Product. Now, Her Multi-Million-Dollar Company Sells It for More Than $20 an Ounce.
-
Have You Ever Obsessed Over 'What If'? According to Scientists, You Don't Actually Know What Would Have Fixed Everything.
-
After He Was Fired From the UFC, This Former Fighter Turned His Passion Into a Thriving Business
-
Most People Don't Know These 2 Things Are Resume Red Flags. A Career Expert Reveals How to Work Around Them.
-
How One Woman Turned Pandemic-Induced Boredom and a Makeshift Garage Art Studio Into a Thriving Franchise
-
Use These 4 Self-Care Rituals for More Resilience and Less Depletion
-
Shark Tank's Barbara Corcoran Wants to Invest in 'Someone Who Probably Needs a Good Shrink Instead of a Business'