The ILA Strike of 2024: How Port Closures Are Impacting U.S. Businesses

How It Will Affect Business:

The 2024 strike by the International Longshoremen’s Association (ILA) is already disrupting vital supply chains across the East and Gulf Coasts, with potential consequences that could ripple through various industries for weeks or even months.

 

1. 1. Increased Shipping Costs: With major ports closed, businesses will face higher shipping fees as cargo is rerouted to alternate ports or sits idle. This drives up operational costs for industries relying on imported goods, particularly manufacturing and retail.

1. 1. Supply Delays: Companies relying on time-sensitive materials, like food service or manufacturing, are at high risk of production delays. Perishable goods might spoil, and manufacturers could face downtime waiting for necessary components( Wikipedia )( gCaptain ).

1. 1. Inflationary Pressure: The strike could reverse recent progress made in reducing inflation. Limited access to imported goods could cause prices to surge, especially for consumer goods ahead of the holiday season( Wikipedia ).

1. 1. Economic Fallout: Analysts estimate that the U.S. economy could lose between $2 to $5 billion per day during the strike, with prolonged delays leading to further losses. The strike has the potential to damage industries across the board, from retail to construction, depending on how long it persists( gCaptain ).

This ongoing strike is a reminder of how vital smooth port operations are to the entire economy, and businesses should start preparing for potential supply chain disruptions and cost increases now.

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Recent Partner Success:

Amount Funded: $150,000

Outcome: 35% Annual Revenue Growth

Application to Funding: 5 Days!

We were introduced to the owner of a growing construction company that needed capital to expand its operations. The business aimed to upgrade its heavy equipment and increase storage capacity to take on larger contracts. However, due to credit issues stemming from challenges during the pandemic, securing traditional financing was difficult.

Our team worked closely with them to secure the necessary $150,000 in funding, enabling the company to move forward with its expansion plans. The additional equipment and storage space allowed them to accept bigger, more profitable projects, resulting in a 35% increase in annual revenue. The quick turnaround and tailored solution helped strengthen our partner’s relationship with a valued client, ensuring future business opportunities.

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5 Tips for Managing a Working Capital Line of Credit

 

A working capital line of credit can be a powerful tool to maintain smooth business operations, especially when cash flow fluctuates. To make the most of this financial resource, it’s important to manage it wisely. Here are five strategies for effectively handling a working capital line of credit:

 

1. 1. Monitor Your Credit Line Regularly Staying on top of how much you’re borrowing is essential to avoid financial strain. Keep track of transactions and monitor your usage to ensure you’re only drawing from the credit line for necessary business expenses. Regular oversight helps prevent overborrowing, which could negatively impact your cash flow.

1. 1. Plan Repayments Don’t wait until payment deadlines to figure out your repayment strategy. Incorporate credit line payments into your monthly budget, treating them as high-priority expenses. By doing this, you ensure timely payments, avoid penalties, and maintain a healthy financial standing.

1. 1. Use It for Short-Term Needs A working capital line of credit is best suited for short-term operational costs like payroll, rent, or unexpected repairs. Avoid using it for long-term investments or large-scale projects, as the interest rates and revolving nature make it less ideal for these purposes.

1. 1. Keep Your Balance Low Keeping your balance below the credit limit is crucial for two reasons: it provides a cushion for emergency expenses and maintains a favorable credit utilization ratio. A high balance can hurt your credit score and signal over-reliance on borrowed funds, which may affect future borrowing options.

1. 1. Reassess Your Credit Needs Regularly As your business evolves, so do your financial needs. Periodically review how much credit you require and whether your current limit is sufficient. If you find yourself consistently hitting your credit limit or barely using it, it might be time to adjust your line of credit to better suit your business operations.

By using these tips, you can ensure that your working capital line of credit becomes a tool that supports your business growth without adding unnecessary financial risk.

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Become a partner today! Schedule a discovery call with one of our Partner Relationship Managers to explore opportunities and learn how we can support your success. Let’s work together to help you reach new heights!