While the traditional ways of obtaining finance for any business ventures have been either through loans from banks or through personal borrowings from family members and friends, the alternative way can also be through the use of the personal credit card.
It is possible that a credit card holder might possess three to five personal credit cards at a time, with a credit limit totalling to say £15,000 to £20,000. If the aspiring entrepreneur/s isn't/aren't able to obtain funding from anywhere and almost all financial doors are to be closed to him/her/them for some reason or another, then he/she/they can always rely on his/her/their personal credit cards so as to get the business idea off the ground. Although this is an expensive way to finance a new business, there are examples of entrepreneurs who have taken the help of this type of financing for either part or all of their business enterprise. For an instance, it is rumoured that the founders of Google, Larry Page and Sergey Brin, made use of their credit cards to purchase computers and other office equipments in order to start their business. In a similar vein, renowned filmmaker Robert Townsend used his personal credit cards to finance a part of Hollywood Shuffle.
One of the advantages in using personal credits to cover business expenses is that the repayment bill doesn't have to be settled immediately. Depending on the credit card provider of your choice, you will normally get the benefit of an interest free period for up to 56 days.
However, do make a note that there are risks involved when the personal credit card is used to finance a business. If your business is a limited company, then there is a risky chance that you, and not your company, will be personally liable for any debts incurred.
Syed Abedin is a mortgage broker and personal credit expert. His e-mail address is syzab(a)btinternet.com
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