|
Using A Credit Card To Fund Your Business
By: Peter Kenny
The spate of credit card offers and leaflets that most of us receive through the
post or in our daily newspapers, which promise us unlimited spending power and
in some cases blank cheques, has threw up a major surprise and that is the way
that small businesses are using personal credit cards that you or I use for
granted in our daily personal use, to finance their business practices.
Many are doing this to the tune of almost £2 Billion a month and this is not
getting spent on business expenses that they can claim back from the company
coffers. The biggest uses are travel or entertainment. The personal credit cards
are being used to fund the workings of the everyday running of the business and
in some cases the company car is being charged to the credit card.
This has all come about because of the easy access to credit card lenders funds,
which are put under our noses at every turn. You cannot even go to a supermarket
or shopping mall without being accosted by some credit card sales representative
offering you the chance of spending someone else’s cash.
So all in all it is hardly surprising that many people who either have to fund a
small business or wish to start one, would feel this to be an easier road to go
down, rather than sitting in front of the local friendly neighbourhood bank
manager and having to explain all the little details on why you need a loan,
while asking you to offer up guarantees. The guarantees enable them to be able
to get their cash back and this could mean putting your home up as collateral if
it all backfires.
So all of this makes the applying for the credit cards the easy option, as it
quite easy to apply to credit cards and see yourself with a spending power of
thousands and thousands of pounds with an amount as much as £50,000 easily
attainable. So much easier than applying to the bank for this amount of backing!
There a simple reason for this and that is that the bank, even if you think that
they are killing your business plan, have to look at all the pros and cons to
your claim and will access things that may even go wrong that you have not even
considered or put into your business plan, before they will loosen the purse
strings.
By doing this, the banks are also protecting you, yep that’s right protecting
you from any irresponsible borrowing that may lead to you falling into a debt
that you simply cannot find away out of. By going to the bank, you will be
protecting yourself personally and if you are going the way of a limited
company, with the assets of the business alone being the sole contributor of any
debts owed, where as if you go down the personal credit card route, you will in
no doubt find that a couple of big burly bailiffs, will come a Knocking at your
door and start taking stock of you and your families belongings and that would
be a tad more harder to take than a NO from your bank manager.
About the Author:
Peter Kenny is a writer for creditcards-gb.co.uk. For additional articles and an
extensive resource for everything about credit cards and loans, please visit us
at
www.creditcards-gb.co.uk and
www.moneywize.co.uk |
