Make Your Debt Pay You – Finance Your Business With Credit
When you are building a new business or trying to grow an established one, the one thing that you will always need is money. Whether you are switching from freelancing to entrepreneurship or starting a new venture, don’t let financing hold you back. For some, money really does appear to grow on trees, but for the majority of us, we have to come up with creative ways of funding our new business ventures.
Put it on credit
Credit is a viable option for sourcing finance for your small business. In fact, a report from the SBA shows that 10% of financing dollars comes from credit cards. A credit card can provide flexible capital during a growth phase as credit cards can offer lower rates and rewards not gained when taking out a small business loan. A credit card is also a great way of building up a credit score for your business which will increase funding opportunities for you in the future.
Use it or lose it
If you are currently funding your business using savings or income from sales, credit is still something to think about. Applying for credit before you need it will build up your credit score. Also, if you build up a relationship with a financial institution and prove yourself to be a reliable customer, the level of credit available to you will grow over time. This means that when the time comes to instigate a new growth initiative for your business, you are able to leverage the credit already available for a short term ingestion of capital.
Be smart – move your debt
If you have already leveraged a credit card for a quick burst of cash and want to reduce the fees that you are paying, a credit card balance transfer is a good option for you. In this scenario, you are treating a credit card as an interest free loan. This is a great way of reducing the pressure to clear a debt in the short term as the repayments are reduced, giving you additional time to generate revenue from your venture.
The use of a business credit card is a viable way to fund your small business short term, especially during a period of growth when you are investing everything you earn into the business. Don’t let a shortage of funds hold you back – think smart and take the opportunities to grow as they present themselves.