credit.jpgIt’s very common for many entrepreneurs to finance a new business venture using their credit card. However, it can be a dangerous proposition to use a personal credit card to finance your business. If you must do it until you raise capital then do it with a stop gap plan in place. When you reach a point that pays your debt back, make sure you stop using your personal credit card and approach a bank to finance your business venture.

When starting a small business then you can use your personal credit cards for two things — one would be asset acquisition and the second would be for working capital.

There isn’t a business out there that doesn’t need to have telephones, scanner, printer, copier, mobile phones and other equipment and devices that can help the business execute its operations. You can get most of these items required to set up your office for little or no money but instead paying small monthly payments. This is where you can use your personal credit card. Usually most office supply stores have offers if you sign up for their credit card, and this option is definitely worth exploring.

Now for the working capital. If you charge your purchase to your personal credit card, it is very possible that the bank will extend the grace period and you can match the account receivables to the grace period. Therefore your business would have to only pay the balance close to the due date.

Or you could carry forward the outstanding cost of goods to the next month where in the current month you pay just the minimum payment on your credit card. Once you receive the payment in the following month, you can pay the principal amount plus the interest in full.

Bottom line is to use your credit card wisely, and it can help you jump start your business idea!

http://www.iWantSuccess.com

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