If you’ve recently started your own business, you know how difficult it can be to handle the daunting bills and expenses on your own. Also, not only are bank loans difficult to get, but sometimes they don’t even cover all the costs. Too many entrepreneurs try to finance their business expenses on their personal credit cards, only to find themselves without the credit line they’ve come to expect and tangled personal and business related expenses. If any of these scenarios sound familiar, maybe it’s time to consider financing your business with a business credit card. With a business credit card, there’s no need to risk your financial security or skimp on business needs.
The number one reason to get a business credit card is to build a solid credit history for your new venture. If your start-up lacks in assets or a business history, it’s nearly impossible to get a loan. Banks and lenders evaluate companies based on credit ratings, not just how much money you have or make. By developing a solid credit foundation early in the game, you and your business are at a specific advantage. When you later look to expand your business or make any major investments, lenders will evaluate your request according to your established credit history.
Managing your cash flow is another advantage to funding your business on credit cards. There are numerous costs associated with starting a new business, just a few of which include supplies, employees, utilities and services. Managing the costs can be daunting. A business credit card will allow you to organize and automatically pay your monthly expenses, which saves you the time consuming chore of ‘doing bills’. This ensures that your suppliers and services are all paid in full and on time, while you building a great credit rating for your business. By maximizing your cash flow management, your business’s finances become streamlined, allowing you to build a better business credit history.
Business credit cards offer entrepreneurs some perks that most individuals never even see. It’s possible to get cards with both large credit lines and low APRs. The rewards and introductory packages credit card companies offer small businesses are often much better than with normal cards, and can quickly yield free flights, generous rebates, and long-term, interest free deals. Credit card companies realize the potential in any beginning business, and want to be there as your business grows.
As a new business owner, it’s especially important that you control your credit card spending. Make sure that you don’t spend beyond your means and that your cash flow is manageable. Don’t borrow against your card if you’re doubtful that your investments will pay for themselves in the time you estimate. Be sure to consider how long it will take you to pay off your major investments. Also, be sure to develop a business budget that includes some amount of certainty. While no business investments are guaranteed, it’s smart to gauge the one’s you think will be most successful, and use your card to fund the more promising investments.
When getting a business credit card, be sure to find a card that fulfills your business needs. There are many cards available, and many factors to consider, but with a little bit of research you can find a card that works for your business. Many credit card companies realize entrepreneurs look for different factors in a card, so many companies have cards designed especially for small businesses and multiple industries. If you are just managing monthly payments and don’t need to finance any large purchases, don’t worry so much about the APR and instead look for a card that offers major rewards on gas and travel. On the other hand, if you’re looking to use a business credit card in place of a loan, look for the cards that offer longer introductory offers or low APRs. Once you have started building your business credit, be savvy and think of getting a couple different business credit cards to fulfill your different business needs.
If you’re starting a new business, don’t rely on your personal credit line or bank loans when credit card financing is a viable option to creating a profitable and stable company. Do your research, and find a business credit card that fits your needs.
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