Not everyone will be blessed with a fortune to start their own business. The reality for most of us is that we need to save up for years, and work tirelessly day and night just to come up with the money to open our dream business. When that entrepreneurial dream couldn’t wait any longer, there’s also the option of taking out a loan so you can kick-start your entrepreneurial dream.
You can take out a loan from your parents or siblings, and even from your closest friends. It’s nothing to be ashamed of, especially if you will be putting everything on paper and you will be willing to put personal emotions aside. Just make sure that you can agree upon a realistic, detailed, and actionable payment plan, and you will be responsible in making your payments.
The same can be said when you take out a loan from the bank. If you meet all the requirements, you can borrow a much larger amount that will take care of everything you will ever need in putting up your business.
But if you’re just looking to start a small business that can help you make ends meet or create an extra stream of income, you can use your credit card to fund it. It’s simple and convenient, just like purchasing an item from the store. It’s easy to qualify, and there’s no collateral required.
If you’re thinking of opening an online store that will sell different kind of goods, your credit limit should be enough to cover initial purchases, like items you will be selling, and the budget you will allot for advertising and marketing online. Simply perform a cash advance and you will only be paying for that amount, plus interest.
For this reason, it’s best to use a low interest BDO credit card that offers the best rewards program. Since you will be using a huge chunk of your credit limit for this loan, you might as well get all the perks that you can to maximize its use.
Getting your business funding from your credit card means it will not be a big amount. The amount is limited because you can only borrow an amount that’s within your credit limit. The good thing about this is that you will not incur a huge debt because the amount is well within your credit card limit.
However, don’t be too lax. Even if it’s just a small loan amount, interest and finance charges will quickly pile up if you don’t make regular payments. Be vigilant when it comes to payments. Do your best to pay off the loan as soon as possible so that you can fully enjoy the income that you earn from your small business.
As soon as your business comes in full swing and you start earning steadily, pay off the credit card debt! While you’re at it, don’t take out any more loans when you’re still paying off your previous loan. The goal is to own and operate a business with zero debts!
Getting late on your credit card payment even for just a month can seriously affect your money flow and put you in considerable financial stress. Getting the best credit card in Philippines can be a lifesaver when it comes to starting a small businesses, but they are not without serious dangers, too. Make sure that you have good record keeping and you track your business spending. And before you borrow money from your credit card, read the fine print. It’s better to fully understand the risks than be sorry and broke in the end.