Credit Cards that are attached to Lines of Credit are the number one funding source used to start a business. Studies show there are significant benefits for business owners using credit cards, including revenue growth and immediate access to capital. Raising capital for any business can be a key challenge that can be difficult to overcome but credit cards offer an easy solution, especially when they are attached to credit lines.
There are some benefits that are hard to beat with other funding options:
- Fast easy access
- You only pay back what you use
- You only pay a percentage of what you owe each month
- It is a revolving line of credit
Fast Easy Access
If you have ever applied for a term loan for your business, you likely know that the process can be grueling. It can require tons of paperwork, long waits, and very limited flexibility. A credit line is a much easier option to navigate and the process is faster. Once you have the credit line in place you can use what you need when you need it without having to deal with additional paperwork.
You Only Pay Back What You Use!
The fact that you only have to take what you need then only pay back what you use is music to most business owner’s ears. If you have ever taken a term loan you know that the payments that you are assessed every month are based on the total loan amount whether you use the amount or not. Of course, interest is amortized on term loans and you also have to pay that every month. It can get expensive. Credit cards with a line of credit only charge you based on what you have used.
Payments Are Lower
With a credit card with a line of credit attached you only pay a percentage of what you owe every month, there are no prepayment penalties to deal with and in most cases, the payments are much lower than they would be on a term loan which is very important to a new business.
Revolving Line of Credit
With a term loan, you get the money and use it, if you need more you have to apply again. With a credit card with a line of credit, you get to recycle the same money over and over again without the lengthy application process!
Credit cards with lines of credit offer business owners the flexibility that they need!