Dr. Andrew Clark addresses managing operating lines of credit in this edition. He reminds us that credit lines to cash flow can be a slippery slope.
Source: Is My Practice Healthy?, February 27, 2017.
You have borrowed an operating line of credit because you didn’t have enough money in the bank to pay the bills. You must budget to pay the full year expenses PLUS pay off the OLC. This may be the equivalent of 13 or 14 months’ expenses to pay off with 12 months of profit.