Got Business Credit Yet?

As adults, we are taught that we need to build credit. Specific to business, having credit available to you is good because it allows you to purchase items for your business that you may not be able to afford in a lump sum. Business credit gives you a way to finance your business and pay it back later. If you are able to pay your balance before the interest rate hits, that’s even better and you have borrowed money for free.

 

We will go over a lot of ways to create capital by using credit in your business. What is capital? Inc.com’s encyclopedia defines capital as the money or wealth needed to produce goods and services. In the most basic terms, it is money. All businesses must have capital in order to purchase assets and maintain their operations. Credit cards, loans, and line of credits are to name a few ways to access credit to create capital.

 

Most entrepreneurs are taught to start directly with getting a business loan. However, you may have to start with a personal loan, credit card, or line of credit to finance what your business needs. Business credit isn’t hard but it can be a daunting task to achieve. Since businesses have such a high turnover rate, it can be hard to get funding for businesses, especially from banks.

 

We all want business credit for different reasons, but to get started you need to know ask yourself a few questions.

 

  • Why do I want business credit?
  • What am I going to do with the money from business credit?
  • Do I have a business plan?
  • Can I show my business is making money?
  • What is my plan?
  • When will I pay it back?
  • What am I going to do to make sure I keep my business afloat?
  • When I am making purchases, are the things that I am doing a need or a want?

 

Always remember that just because the money is offered, does NOT mean you have to take it… especially if you don’t have a plan in place for how to use the money and how you will pay it back.

 

So get out your pen and paper and answer these questions before you go to the borrowing money.