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Credit Card Financing: The Radical and Creative Way to Acquire Business Capital
by: johnlair on
Date: Mon, 13 Dec 2010 Time: 2:58 PM
A lot of start-up entrepreneurs these days have become very creative when it comes to acquiring initial capital for their businesses. Capital has always been vital in the life of a business, for without it is even virtually impossible to start one. Searching for funds to be used as initial business capital is one of the first major concerns during a business’ planning stages.
At first, nobody would imagine that a credit card can actually be used as a way to finance a start-up business. We see that tiny plastic as something we use to shop for stuff or pay bills. It is not unusual for us to hear people telling supermarket counters or waiters, “Charge it!” but what is more unusual was to see a proprietor saying the same thing when it comes to business operations.
Most businesspeople prefer to acquire capital by using a portion of their savings or asking family and friends for assistance, although applying for a loan has become more convenient these days. What turned them of, however, was the red tape involved in applying for one, especially in banks. This is the exact reason why some of them chose to take more creative ways such as credit card financing.
Credit card financing is being used by some businesspeople, particularly start-ups, as a way to raise capital. Through the use of a credit card, a proprietor is able to acquire things such as equipment and materials. Such move has proven to be convenient, especially in maintaining the proper cash flow of the business.
However, credit card financing for a business is a very risky proposition. A lot of businesses collapsed and businesspeople buried deeper in debt due to mounting credit card bills that were used for capitalization. While it is convenient, credit card financing should only be temporary and be replaced soon by more traditional methods such as bank loans.
Credit card financing and other innovative ideas on acquiring capital for a start-up business are products of the resourcefulness and playful imagination of entrepreneurs. This same kind of resourcefulness and playful imagination is one reason why a lot of them succeeded in their business ventures. As long as those two things remain, expect businesspeople to be radically innovative in a lot of things, be it in launching a new business or introducing a new craze to consumers.
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