Monday, February 13, 2012

Financing a Startup Business with a Credit Card

Is it really possible to use a credit card to fund a start up business? The answer to this question can be yes and no, depending on the type of business you want to launch. Indeed, many successful business owners today were able to start from scratch with the help of a credit card. And in fact, there are businesses which can be started with only a small amount of capital.


For instance, if you want to start a home based business and sell vintage clothing online, you can actually start up using a small budget. Of course, you will need a computer and a good camera to be able to offer your products online. You will also need to subscribe to an internet service provider. If you don’t have sufficient cash to cover for these expenses, you can charge them to a credit card and start up your own online shop.

Not all types of businesses can be funded with a credit card alone. If you need a larger fund, you will need to apply for a traditional business loan from a bank or a commercial or private lender to get financed. However, a business credit card can provide you with additional financial aid especially when emergencies or unexpected expenses arise.

Acquiring a business credit card is much easier than obtaining a business loan. For new and start-up businesses, getting a quick approval can be very difficult without business credit history to back up your application. Even an established business may find it a challenge to get a loan if the business credit history is not impressive.

Many business owners use a business credit card as a tool to establish business credit history more easily. This is because issuers of business credit cards report payments and account activities to the major business credit bureaus like D&B or Experian for Business. Hence, as the business credit card is used to pay bills or purchase supplies and the charges are paid on time, business credit history is strengthened.

Further information about Start Up Business Financing can be found in the Financing a Startup Business with a Credit Card.


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