Skip to content

October 2020

Can You Use Your Credit Cards To Start A Small Business

A credit card, which is made of metal or plastic, is a card issued by a financial or credit institution. With such card, you are given the capability to make various purchases and/or payments by borrowing money from the issuing institution or company until a certain limit. You are then given until the end of each month to repay what you have borrowed. An example of a credit card is the American Express and you could visit the americanexpress.com/confirmcard to confirm your card now.

Credit Cards – What Are They?

With your credit card, you are able to gain access to a credit limit which is set by the company or institution who issued the credit card. A credit limit, which could differ form one issuer to another, is the maximum amount of money you could borrow to use for purchases or payments.

Rather than giving you the approved credit limit in cash, the credit card issuer allows you to make use of your credit limit, whether in small amounts or the maximum limit, at a given time. When you are able to settle the money you borrowed, you are again allowed to borrow. So, visit americanexpress/confirmcard to confirm your card now.

In contradiction to what many believe, credit cards are actually very useful, handy and practical as long as it is used wisely and responsibly. This means, monitoring your spending and making payments on time.

Starting a Small Business with Your Credit Card – Is It Possible?

Coming up with sufficient capital is one of the biggest and major stumbling blocks to establishing a business or make an initial investment. Even though you have a definite, incredible and promising idea towards generating a revenue, lack of or inadequate funds or capital won’t allow you your business idea to materialize.

While credit cards are used for small or large purchases or for payments, some would ask if it is possible to make use of your credit card to start a small business. Technically, this is possible. Many entrepreneurs have made an attempt to do so, whereas others have actually succeeded.

Although it is possible to start a small business using credit cards, this doesn’t necessarily mean that this is the right and most appropriate option for you. Credit cards are principally a means of funding and are best for individuals who aren’t keen on making use of other options for funding such s debit cards and cash. However, business owners or entrepreneurs who are prepared to take and deal with a substantial personal risk may try use their credit cards in establishing their small business. But then again, it is best to reserve your credit cards for emergencies or as a back-up to augment your primary means of funding.

https://youtu.be/A8K3C0LcfvM

Equity as the basis for starting a business

In order to set up your business, you should have equity if possible.

Because the equity ensures that

  • Your company remains solvent
  • the risk of liquidity problems is minimized
  • You have to draw less outside the capital

The minimum equity capital should not be below 20% if possible

Bringing inequity makes it easier for you to access outside capital if you cannot start your own business entirely from your own resources. With the equity you bring in, you convey to the banks and investors the seriousness of your entrepreneurial project as well as your own commitment to take a risk. This means that banks and investors are also more willing to accept the economic risk involved in providing external capital. You may visit 918kiss download site while checking information on equity online.

Pay attention to the financial rules

The equity you should use to

to finance the fixed assets

to finance the fixed assets and a third of the current assets

to cover the fixed assets and the iron stocks of the current assets

Disclosure of equity in the balance sheet

In the balance sheet, equity results from the difference between assets and liabilities. Assets and liabilities must always be the same in terms of amount. If there is a different amount on one side, a difference is added as a balance.

Equity is also referred to as business assets.

What other advantages does equity have in starting a business?

Bringing equity into the business start-up is advantageous because

  • the equity is interest and repayment free
  • your company’s equity is available indefinitely or for a long period of time
  • the equity is not linked to any conditions
  • equity minimizes the risk of your company becoming over-indebted
  • equity creates less dependency on lenders.

The provision of equity through third parties

If you do not have the opportunity to contribute equity, there is also the possibility of obtaining equity through third parties.

Ask for support from your friends or family.

The best thing to do first is to ask your friends or family members whether they have the opportunity to support you in your business venture. Please note, however, that the participation results in a liability claim against the third party.

In addition to friends and families, there are also private investors, such as private equity investors or venture capital investment companies.

𐌢