There are many business owners who want to accelerate the growth of their business, but it usually depends on having a little more money on hand. With this, they could advertise more, replace old equipment or buy new ones, increase their inventory to sell more items, etc.
Some business owners take matters into their own hands by funding these expenses from their personal stash. However, using personal credit cards for business is risky business as you take full responsibility. If your business, God forbid, is ever sued or bankrupt, you risk losing your personal possessions and the good credit rating that took you years to build.
Now, what if there was a way to free up some of that needed money you’re currently using to support your business, by matching some of your spending with items your business already buys on a regular basis? Well, it exists and it’s in the form of business credit cards.
In other words, if you spend $500 cash each week on real estate supplies to make repairs to your properties, but now make those same purchases using business credit cards for just one month, that would temporarily free up $2,000 cash from your regular operation. budget.
Of course, you are responsible for paying off the balances on any business credit cards you receive, but that would be over a period of time that would give you enough opportunity to make a profit on the $2000 used on the business credit cards before you the due date of the first payment. . Are you seeing how having business credit is an advantage for you? Let’s go a little further.
Business credit cards are a fairly quick way to get resources for short-term needs and, at the same time, can increase the purchasing power of your business. But it has to be used economically and not spend everything on sprees just because it is available.
Other advantages include:
• Business owners with a limited credit file or credit history can apply without meeting the strict requirements of traditional banks.
• It is much easier to make purchases online and make cash withdrawals from these lines of credit.
• Bookkeeping is simplified with the use of monthly and year-end statements to track expenses and pay taxes.
• Unlike installment loans, business credit cards offer discounts and rewards that can be used for air travel and the like.
• Trade credit builds credit. By paying on time and paying more than the minimum monthly fee, you incentivize lenders to increase credit limits and lower interest rates.
As with all credit, commercial credit has certain requirements for its approval:
• 720 credit score
• No bankruptcies
• No foreclosures
• No late payments in the last 24 months
• Possession of a credit card with a limit of $5k.
Building a good, strong business credit report allows you to stop relying on your personal credit to support your business efforts. It also helps you qualify for future financing your business may need from traditional lenders.
