Using credit card to fund you business or startup?
There was a very interesting article in Entrepreneur Magazine regarding whether or not to use personal or business credit cards to finance a new business. According to the article, recent surveys show that credit cards are among the most popular ways of funding a new company. In fact it was one of the two most popular options, along with borrowing from relatives.
The article goes on to discuss the pitfalls of running up a debt on a “business” card that is personally guaranteed by the owner(s) of the company. Although I recommend waiting until your corporation has enough of a credit history to be eligible for a credit card with no personal guarantee this article is a good read for those of you who simply can’t wait that long (it typically takes two years or more of a good credit history for a corporation to qualify with no guarantee).
Here’s a link to the article, which is being syndicated by MSNBC:
http://msnbc.msn.com/id/10806912/
Check back often for more small business finance discussion.
The article goes on to discuss the pitfalls of running up a debt on a “business” card that is personally guaranteed by the owner(s) of the company. Although I recommend waiting until your corporation has enough of a credit history to be eligible for a credit card with no personal guarantee this article is a good read for those of you who simply can’t wait that long (it typically takes two years or more of a good credit history for a corporation to qualify with no guarantee).
Here’s a link to the article, which is being syndicated by MSNBC:
http://msnbc.msn.com/id/10806912/
Check back often for more small business finance discussion.
1 Comments:
I was just having a conversation with a reporter about small business credit cards and discussing how they really are no different than personal credit cards for the most part.
You have to take responsibility for the charges personally -- they are almost more of a different way for the credit card companies to market to people -- by giving cardholders a card separate from personal expenses, giving some business discounts like % off at air couriers, office supply stores, car rental companies, etc. But essentially they are the same as a personal card, at least in the short term, as you mention.
By JustinMcH, at 1:16 PM
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