How to Avoid Using Your Personal Credit to Start a Business

Last Updated May 06 2008 11:29:03.

Should I use my personal credit cards? Many business owners start their company right out of their home. They are looking for a couple thousand dollars to get the equipment necessary or advertising put together to get their venture off the ground.

Most start-up’s I have spoken with will use personal credit cards to pay for much of these start-up expenses. This can be either a very good or very bad idea depending upon your situation and what you are purchasing.

If you are using the money to buy products such as computers, office supplies, and furniture you should consider building credit separate from you personally and set up a corporate structure to obtain credit under the corporation and use that credit to purchase these items. (see http://www.corporatecredit.biz for more information) If you need cash to spend on things that companies don’t grant credit on, you will likely need to use your personal bank credit card and hope your interest rates are low.

What ever you can purchase on credit do so at the early stages of your company, so you conserve the cash you have. Keep in mind that you need to pay back the credit so don’t overspend so the company doesn’t have the ability to make payments. The idea is to conserve cash so you can use it as you need to and wisely use your credit to develop leverage for you and your company long term.

Source: David Gass, President & CEO, Business Credit Services, Inc. Business Credit Services, Inc. specializes in helping businesses build business credit and establish an excellent corporate credit history. Download their free booklet How to Build Business Credit at http://corporatecredit.biz

Original Article: How to Avoid Using Your Personal Credit to Start a Business published at http://corporatecredit.biz

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