In theory, entrepreneurs the world over have learned over the course of the past few years to shun credit and avoid it all costs, much like they would the plague or any other type of lethal affliction. In actuality, a healthy crediting system is the bone and marrow of any functional economy. And since small and medium enterprises are the pawns on this big chessboard we call the business scene, it goes without saying that SMEs are also worthy candidates for credit. Now, establishing that the economy can benefit from SME credit lines is easy-peasy, while working that link backwards is not as easily attainable a feat. What is the truth, then? Can your small business benefit from taking out a creditcard, or would such a move only signal the beginning of the end? Would you be digging yourself into an early grave of insolvency risks, or can you actually stand to reap some perks off this bold move? We truly believe credit cards are effective business tools, which no start-up owner ought to ignore. How so? Read on to find out.
Comfort and Convenience
Your business can incur a great number of current costs, from paying for business lunches to unexpected office supply run-outs which need to be addressed quickly. In absence of a business credit card, either you, the owner/ manager, or a member of your staff, need to cover those costs from their personal bank account. The money is then claimed back through a complex process, which definitely entails more paperwork than would be reasonably necessary for such meager costs. A business card can help you bypass that process and simply run all the expenses through the business. Additionally, duplicate cards can be issued for several holders in the case of business cards. As such you wonít need to worry about whoís got the card on them today. Simply pay as you go along, make sure all payments require managementís approval, and youíre all set for comfort and convenience.
Reap the Benefits
Most business credit cards will offer spectacular introductory rates ñ the standard offer is a 0% interest for the first three months. While subsequent rates will vary, they tend to run low, should you be able to keep up monthly balance payments. The other perks and bonuses are in many ways similar to what private individuals who hold platinum or gold cards enjoy. That is, your company will be able to exchange foreign currency at advantageous rates during trips aboard. You are likely to enjoy a 90 day insurance cover for all purchases made in the beginning of your time as a client of the bank. You will receive access to special events, entertainment and shopping opportunities, such as sales and discounts, and you may even be able to opt for extra mileage on your airplane fare, as part of a Frequent Flier program affiliated with the credit card.
A Final Word of Advice
A business credit card is still a credit card. Failure to repay your interest or your credit will result in a poor credit score for your enterprise, which will undoubtedly raise suspicions from any other creditors you might be doing business with. Additionally, your business will have a much more difficult time in accessing loans from other lenders. What is more, business credit cards are ideal for covering certain relatively small expenses. If you can trust your staff enough with the company credit card and are sure you can afford paying off your monthly balances, then you should definitely spring for it. If, however, that credit card (or any other type of loan, for that matter), is the sole source of income at your company, then you have no place even considering a credit card to begin with. Credit cards are a tool for stable business ventures, and will not replace profit-making as the only way to keep your business competitive.