When starting your small business, sorting out how much money you need to get started can be stressful. It’s essential to weigh all your funding options, including funding your small business partially on credit.
There are advantages and disadvantages to funding your company on your business credit card, so you must choose what is best for you and your business.
Learn more about how much money you need to save if you should fund your company on your credit card, and which option works for you — business or personal credit cards.
When starting a business, you need to know how much money it will take to set off on the right path. There are many types of costs to consider when it comes to starting and running a business, including:
Depending on what type of business you're creating and the location of your business, your start-up costs will vary, but could reach into the tens of thousands of dollars.
To help keep track of all your start-up costs, keeping a budget and a close eye on all your expenses is important. Some expense tracking software allows you to monitor your financials while providing your lenders with easy-to-read and professional-looking financial reports.
Because there are so many factors to consider when planning out how much money you need to get started on your venture, it’s crucial to consider different methods of funding your dream. These include small business loans, grants, crowdfunding, and paying for it on your credit card.
While it’s not recommended to fund your small business entirely on your credit card, it can be a good idea to pay for some of your start-up costs using this method. Things you'll want to fund on your credit card are low-cost expenses that you can comfortably pay off by the time your monthly statement comes due, like office supplies, uniforms, and initial inventory costs.
Applying for a business credit card when starting your business isn’t mandatory, and you’re free to use your personal credit to handle all your business costs. But there are many benefits to using a business credit card, which is essential to your financial reporting.
Benefits:
Drawbacks:
No matter how you decide to fund your business, make sure you’re not blindsided by your financial obligations along the way. No entrepreneur wants to wind up in a situation where they’re unable to manage their monthly debt payments. Consider all your funding options and consult with a professional to ensure you’re successful at both managing your business and your budget.
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