November 8, 2016 at 8:04 pm #59102
I got a question from a reader today who is interested in using credit cards to finance his startup. He needs $40K and has great personal credit but was having difficulty qualifying for a traditional bank loan because the business was new.
If you’re in this position, using credit cards is actually a pretty common choice. While credit cards get a bad rap for getting people into debt, it can be a good financing solution if used correctly.
The main things to keep in mind are to pay off as much of your bill as you can each month and to use a dedicated business credit card (not a personal credit card). Business credit cards generally have higher credit limits and more perks for the business owner, such as rewards points.
We have an article that looks at the best business credit cards to get you started. You can also look at our article on credit card stacking, the practice of combining credit limits of multiple credit cards to reach your financing goal.