Many new entrepreneurs have difficulty getting a business loan because they do not have the type of credit history that would qualify them for the business loan. Often, the new entrepreneur must find another source for funding. The easiest and most convenient way to fund their business is with a personal credit card. In fact, recent statistics compiled by financial sources show that financing a business with personal credits cards is up. However, there is also a downside. Those business people might end up destroying their credit history and making it even more difficult to qualify for a business loan.
Why A Business Owner Should Avoid Using Personal Credit Cards
Of course, it’s easy to simply take a personal credit card and fund a new business, instead of waiting for a business loan approval. Still, it is important for that business owner to realize that this step is harmful to business growth. It will not build a business financial history. In addition, this might lead to ruining the business owner’s personal credit history. Business owners are not taking this step because it is an easy way out of a financial crunch. The business owner is taking this dramatic step because it is the only way out of a financial bind. Generally, the new business owner gets into this situation because people and institutions take advantage of the new business owner. They pay invoices late or the mobile payments are made too late. Certainly, it appears modern tech is a disadvantage to new business owners.