Finance Your Small Business Using a Business Credit Card
Business Credit Card

Finance Your Small Business Using a Business Credit Card

One of the most important things for a small business is making sure you have cash flow when you need it. This can be during good times to react to surges in sales or slow periods to pay expenses during periods of slow sales. It can provide the funding and cash flow to balance out these variances and timing issues.

Using a Business Credit Card to finance your small business can be a smart financial move that allows for much more flexibility and benefits than a typical business loan where you have to put up collateral to fund you small business.

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There are many business credit cards that start out offering a very low interest rate including many that will give you a 0% APR for up to 12 months. This will then turn into a low fixed rate after the introductory period. This 12 month period is a true benefit for your small business as it will save you those interest charges at startup. You can then maintain a low fixed interest rate which can be much better than a normal business loan.

Most of these Business Credit Cards will also offer you benefits along with the card. Some Key Benefits can be free travel accident insurance and insurance coverage on rental vehicles. This is a nice perk and comes completely free with the usage of your business credit card.

Another nice benefit of using a Business Credit Card to fund your business is that all of your transactions can earn  you points with the credit card company that can then be redeemed for air miles used for travel, business and office supplies or in the form of a percentage of cash back to your business. These reward points can add up quickly over the year and can also offset your normal cash outlay for these type of business expenses and business travel.

Tracking the inputs and outputs to your business cash flow is extremely important. Using a Business Credit Card to finance your business will also allow you to keep all of these business expenses at one source for tracking purposes. You can then easily go online and check your account records. Many websites now have business reporting features and charts that can show you a breakdown of your business expenses so you can see where your money is being spent to track your return on investment and make adjustments based on your spending trends.

The main benefit you will see by using a Business Credit Card is at tax time. When you must file your business taxes to the IRS for the year you will be glad you can easily download a spreadsheet right from your credit card account and have a complete listing of all business expenses and transactions that can easily be sorted and stored electronically. It makes reporting these expenses a snap.

When purchasing expense items with your business credit card you also give yourself protection against fraud or items that do not meet your expectation. Most credit card companies will remove these types of charges at your request if there is a dispute Also if an item you bought is damaged, many business credit cards have protection and will refund your claim at your request. This can be a nice feature and benefit on purchases and is called purchase protection.

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A Business Credit Card just makes sense for your business and should just be one of those items on the check list when starting your company or even for an existing company that has not used business credit cards in the past. They give you flexibility and cash when you need it the most along with many benefits you just cannot get in a conventional loan product.

If your advertising is really converting sales for you and you are tight on money, you sure don’t want to have to stop your advertising campaign. This is when a business credit card can come in handy to allow you to have the means and funding to continue your campaign and reap the profits in the following month from sales gained through your advertising campaign.  This is just another example of the benefits of funding and financing your small business with business credit cards.