Is it advisable to venture in a business using credit cards?
Question:
Answer:
Bank financing may turn out cheaper than credit cards, but credit cards are much easier to avail of than bank financing. It depends on many factors:
1. Can you get bank financing? If you are not likely to get bank financing, then credit cards can be your option.
2. Do you have collateral? Banks need collateral for your loans, but not credit cards. If you don't have collateral, then credit cards are the way to go.
3. Do you have good credit history? If you already have credit card, then you have access to money, even if you presently don't have good credit history.
4. Have you prepared a business plan? Banks require a business plan; credit cards do not.
5. Can the amount you need be covered by your credit card balance? If you need a small amount then credit card may be a faster and easier way to get capital
6. How much do you need? If you need $200,000 then bank financing would be the way to go. But if you only need $5,000 (and you don't have the 6Cs that banks need then you are better off with credit card)
7. What is the type of your business? Banks hardly give loans to home businesses, and still view Internet-based businesses as high risk. If you are planning to start these types of businesses, then you are better off with credit card.
Banks evaluate your credit worthiness and risk levels of your business. They can be cheap, but it is harder. Credit cards on the other hand are easy to get, but they are an expensive source of funds.
Hard to answer you this as much as i wish.
Depends on the business type..and the capital you need to invest in. Also take into consideration the interest level and the total capital cost in both cases. best thing to approach it is to make a study case for both ..and see which is the most efficient based on risks/cost/profit/cash-flow.
For an elaborate and a real helping answer you will need to give some more details.
no debt is best until you have researched your business venture to death. the best route is to avoid using debt to finance a business as you are really getting off on a bad foot so avoid it at all costs.
I suggest Bank Fincancing. On credit cards you are expected to pay the probably million at the end of the month or so. If you use bank financing you have the priviledge of paying it off bits at a time. For instance, my father. He bought a cabnet making shop and payed two million to buy it. He and his partner used bank finances to buy it. They then marketed, designed, bid on several jobs, and almost have it payed off. This was only one or two years ago. So yes, bank finances are better.
The long winded one is right on, but long winded.
The question you need to ask is whether you are going to immediately make money and be able to pay.
I am a lawyer. I started my practice on a 5K credit card. I got my first case the second day and received 1K. By the second week, I was half way there.
You have to be honest and practical.
No bank is going to loan you money.
Will this business make money and is the amount of money more than $3.00. You cannot get rich (or pay back the loan) trying to flip a bunch of $3.00 transactions.
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