It goes without saying that we here at AVPS applaud the use of credit cards and other payment systems. Such use keeps cash and goods flowing through the economy, and benefits both consumers and vendors. And of course, it’s our business to process those payments, and make sure those vendors can give their customers as many payment options as possible!
But there are perhaps circumstances where heavy reliance on cards isn’t advisable. According to an article published on financial website “The Street,” earlier this week, one of those circumstances might be when you’re starting a new business.
For one thing, the article notes, “small business credit cards don’t protect you from personal liability.” Further, “you should strive to avoid using a credit card to fund an early-stage company,” as it cites a study which says every $1,000 in such debt racked up by business owners decreases the likelihood of that business’ survival by more than 2%.
Additionally, business credit and personal credit aren’t as immune from affecting each other as one might think. Each could negatively impact the other.
What does it mean for you? The article advises seeking backer financing whenever possible, and AVPS also has some helpful alternatives, including Merchant Cash Advances, which allows you to get the working start-up capital you need, without needing to pay us until you’re paid.
Inquire within. And save your credit cards until your new business is thriving!