Doing business on extended credit lines is as common as it is expensive, but often remains the only way.
I once visited a large poultry cooperative organization with one of my customers, who wanted to market a new vitamin and trace mineral premix line I designed. Everything seemed to be going well, as the premixes were designed for optimal profitability, the margins were reasonable, and quality was meticulously assured. The deal broke, however, when the president and CEO of the cooperative asked for a 12-month credit line. In less than five minutes, we were driving back to our offices having forgotten all about this “opportunity,” because this 12-month credit line meant an exposure of several million dollars, which my client was not ready to gamble upon.