Credit Line as Reserves

[Max T.]

Hello everyone,

What are the collective thoughts on having a line of credit instead of actual cash reserves?

I know it sounds ludicrous! Cash reserves are what get you through those times when all the Capex comes down on you at once. But....

There is a lot of wisdom on BP about making your cash work for you as much as possible. A substantial amount of cash tied up in a reserve account is the opposite of that.

So I'm just trying to reconcile both camps of advice - maximum leverage vs cash reserves . And I figured a credit line could be a reasonable alternative to cash reserves since you don't make payments until your make a draw. Have at it!