Today’s Tip
Best Practice: Creating and growing a brand requires capital. Using a personal credit card may be easier for a start-up business.
Today’s Article: Access to Capital – Personal Credit Card
Using or getting a personal credit card may be easier for a start-up business, especially if an applicant’s credit score is lower than the bank requires for business credit.
Advantages of Personal Credit Card
1. Easier to get for a startup business
2. Important option if the credit score is lower than required for business credit
3. If there is no annual fee and the money is paid back in same billing cycle – no interest
4. Option for cash advances and buying products or services on credit
5. Have a structured flexible payback period
6. Way to establishing credit or improving credit score for a potential future business funder
Disadvantages of Trade Credit
1. Debt that a business has to repay – creates more overhead in your business
2. Applicant needs to have good credit and may require running a credit report
3. Late-payment or delinquency penalties can be very expensive
4. Access to personal credit is more limited with lower credit score or at a higher fee
5. An outside lender is now involved in your company – choose wisely
6. Can take time to secure, application process
Action Step: If you can pay off the credit charges in 30 days or less, have a credit card that has no or a low annual fee and low interest rates, using a credit card may make sense.
Additional Resources
More Ways to Access Capital Return to Brand Library Return to Brand Yourself
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