Starting or growing a business takes capital. In our unpredictable economy, start-ups and even established small businesses may find it difficult to get a traditional business loan. This is where business credit cards can help. They allow businesses access to funds for major purchases and allow them to build a respectable credit rating. Here are three ways a business credit card helps you expand your business and make your goals a reality.
Spreading the cost
Some businesses opt for charge cards, which provide funds and allow a grace period before repayment is due. However, most charge cards require the full balance to be paid regularly. Credit cards generally only require minimum monthly payments. That makes managing money much easier. Not having to pay back huge sums each month lets you make business plans like launching a new product or buying things such as shopping cart software.
Having a global presence is a great way to expand your business, and credit cards are one way to help with that. Most credit cards are accepted worldwide. Say you need to travel to Europe to set up a deal or make a business purchase. Not only can you purchase the airfare on your card, but you can use the card for any business expenses when you arrive. So that’s the hotel, food and any entertaining costs dealt with.
Business expenses can become complex, especially with a large workforce. Using one business credit card for all expenses means there’s only one statement to deal with when it comes to working out the expenses bill. This is also handy when it comes time to do the taxes. Employees can be added as authorized users where appropriate. There’s no expense reimbursement to deal with, which saves a lot of time and effort.
Chris Van Patten of New York app developer Van Patten Media said, “Keeping track of expenses on my personal card and making sure the business was properly reimbursing them had gotten jumbled and confusing, which led to me avoiding it entirely and personally eating the cost on many expenses.”
He switched to a business credit card so he could see all his business purchases in one place and help his accountant track business spending.
As with any finance option, responsible repayments and keeping an eye on interest rates are essential. With this in mind, a business credit card could be just the thing to get your business off the ground, or keep you one step ahead of the competition.