There are a lot of business owners who want to accelerate the growth of their business, but it’s usually dependent upon having a little bit more ready money. With this, they would be able to advertise more, replace old or buy new equipment, increase their inventory in order to sell more items, etc.
Some business owners take matters into their own hands by funding these expenses from their personal stash. However, using personal credit cards for business ventures is a risky-business since you assume total liability. If your company, God forbid, is ever sued or goes under, you risk losing your personal possessions and the good credit rating that took you years to build.
Now what if there was a way to free up some of that needed money you are currently using to support your business, by matching some of your expenses with items your business is already buying on a regular basis? Well, there is and it is in the form of business credit cards.
In other words, if you dish out $500 cash each week on realty supplies to make repairs on your properties, but now instead you make those same purchases using business credit cards for just one month, that would temporarily free up $2000 cash from your usual operating budget.
Of course, you are responsible to pay the balances on any business credit cards you receive, but that would be over a period of time giving you enough occasion to make a profit from the $2000 utilized on the business credit cards before the first payment is due. Are you seeing how having business credit is to your advantage? Let’s go a little further.
Business credit cards are a pretty darn quick way to get resources for short-term needs and at the same time they can increase your business’s purchasing power. But it has to be used economically and not to go all out on spending sprees just because it is available.
Other advantages include:
• Business owners with a limited credit file or credit history can apply without providing the stringent requirements of traditional banks.
• It is much easier to make purchases online and make cash withdrawals from these credit lines.
• Bookkeeping becomes simplified with the use of monthly statements and year-end statements to track expenses and pay taxes.
• Unlike installment loans, business credit cards offer discounts and rewards that can be used toward air travel and the like.
• Business credit builds credit. By paying on time and paying more than the monthly minimum fee, incentivizes lenders to increase credit limits and lower interest rates.
Like with all credit, business credit does have certain qualifications for approval:
• 720 credit score
• No bankruptcies
• No foreclosures
• No late payments in the past 24 months
• Possession of a credit card with a $5k limit.
Building a good strong business credit report allows you to stop relying on your personal credit to support your business endeavors. It also helps you to qualify for future financing your company may need from traditional lenders.