In the life of every entrepreneur or every business, there will always come a time when one will need outside financial help, maybe to fund expansion or to support the business in tough financial times. However, business financing is not that easy to get, especially for a small business that is just starting up. Banks of often require a collateral and good credit score for such loan, which more often, a small entrepreneur does not have. So what other alternative do small businesses have?
The best solution: business credit card. As small business lending dries up, this credit facility has been the lifesaver of many entrepreneurs. Many small business owners use it to finance their operations. If you are thinking of getting one, the following are three important criteria that you must carefully consider: annual fees, interest rates, rewards.
Variable rate credit cards, which interest can be raised in unlimited rate, can be a nightmare. So you must look for one that has a cap on interest rate increases. As for the annual fees and rewards, some companies that charge annual fees offer attractive reward programs (e.g. cash back and discounts) to their borrowers, particularly those with good credit. Thus, when choosing a credit card, calculate how likely you are to enjoy the rewards and how helpful they will be to your business.
