Business Credit Cards
Having available credit available to a new business venture may not be absolutely necessary, but it can certainly help to have it.
The Drawbacks of Business Credit Cards
Many small business owners don’t realize that they are only initially starting out on a business and have not yet established a business credit score, their professional and personal finances can be blended. That is because most credit cards require a personal liability agreement from the business owner until the company/business is well established.
That said, business owners can be held liable for any problems with the company’s credit account. For example, if your company doesn’t make the payments on time it could affect your personal credit score.
Other possible disadvantages that business credits may have include the large possibility for employees to abuse the use of company credits by charging personal purchases. Aside from this, fewer protections may come with it as compared to a personal credit card because the intended use of these credits are for company purposes and not personal. Higher interest rates are also usually charged by business credit cards as compared to personal credit cards.
Business Credit Card Management
Despite the possible disadvantages that credit cards may bring, remember that these things can only happen if there is a mismanagement of your credit account. What you can do is set certain precautions so as to avoid such drawbacks from happening. Remember to register your company with a business credit bureau as they can help you establish a business credit score, which will later on help you forgo with the personal-liability agreement.
Comparing Business Credit Options
The market for distributing credit lines for businesses has really grown over the last 10 years. After all, most entrepreneurs know that owning a sufficient credit line can give a business a lot of advantages. The bigger the company gets, the more useful a credit line becomes.
A small business credit card is basically a credit line catered especially for companies who are just starting out. This type of resource/instrument offers a lot of flexible options, with cash back rewards, special discounts and other business friendly perks/benefits.
Unsecured Line of Credit
As your company grows, having a larger credit line would certainly prove to be more practical. For companies that have large expenses or need to purchase goods in bulk/large quantities, having an unsecured line of credit can offer your business much more flexibility. This particular financing resource can give your business the same services that a business credit card can, but with usually a much lower rate of interest and a higher credit limit. Unlike secure credit cards, no collateral is needed to secure your debts.
As long as you use the credit wisely and pay your bills on time, take advantage of a business credit line, to use to grow/fund your business, and to have in case of an emergency.
“When you need to accomplish something, remember the name “Will Resourceful”. Have the “Will” to see it through and be “Resourceful” enough to get the job done.” Michael “MJ The Terrible” Johnson – Founder & Owner – Masters of Money, LLC.
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