Yes, you can use your credit card to finance your business. Although, many experts recommend against using cards for business endeavors, as they are not a stable resource and cannot provide the stability needed for a business in case of emergency.
We live in a time of creative know-how—a time when we must use all the resources at our disposal to acquire the materials we would like to acquire. Many Americans have thought about opening small businesses, but many become deterred when they think about financing, bank loans and acquiring financial support. Some American business owners have begun to think creatively about acquiring capital and have begun using credit cards to finance their small and large businesses.
According to a Credit-Land Report:
34 percent of business owners use personal credit cards.
59 percent of women use business credit cards to fund their businesses.
44 percent of women business owners rely on personal and family savings to fund their business.
On average, 2.7 different sources of income are used for business funding.
26 percent of women business owners use a business loan to finance their small business.
Bank loans are the most stable and traditional source of business funding. Many small businesses get denied when applying for bank loans because lack incorporation. Incorporating can be a tedious and expensive experience. And because of this, businesses that are incorporated are more likely to be approved for bank loans because it shows the dedication and commitment to their brand and or product.
“Incorporating can increase the credibility of your business, and may also help your chances of getting a bank loan… business owners are growing rapidly in numbers and overall success, but their increased reliance on alternative sources of funding isn’t a great long-term strategy,” said Karen Kobelski, a member of the leadership team at BizFilings, an online company that suggests solutions for business to remain on track to securing their financial future, that helped to conduct the survey.
Incorporating a small business helps to separate the personal financial risks from the company. Once it is incorporated, the business owner is no longer responsible for the company’s liabilities and debts, and is legally a separate entity!