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You've been dreaming about it forever.
It's a hot idea for a new business. But, you don't have start-up capital. You aren't alone. Access to seed money is a big hurdle for many business start-ups. Small business loans can be tough to get for entrepreneurs with no business credit history.
You may have considered tapping a credit card to generate your start-up costs, but are wary of taking on high-interest debt. Here's a way around that. Discover the power of introductory zero-percent rates.
In real estate, the mantra is location, location, location. When it comes to business financing the magic phrase is interest rate, interest rate, interest rate.
Some business credit cards offer an introductory 0% annual percentage rate (APR) on purchases. That means no interest charges for up to 12 months on some cards. Using a business credit card wisely can be a powerful tool for entrepreneurs. Call it plastic with muscle.
Zero percent intro APR offers are basically no-interest loans for a specific time period. Common sense is required, though. You'll need to make the minimum payment each month. If not, you could rack up penalty fees or even lose your promotional APR period.
Treat it like a loan, because it is.
When properly used, 0% intro APR financing can be the lifeblood of a young business. Here are four tips to responsibly use this credit:
- Crunch the numbers. Estimate a budget for your start-up costs and follow it. You don't want to be stuck in a situation where you can't pay off the debt by the end of the introductory period.
- Build positive business credit history.
Using good credit sense could help boost your business credit score. That can help if you ever want to apply for a business loan.
- Don't make late payments.
- Try to make more than the minimum payment each month.
- Don't go over your credit limit.
- Mark your calendar. Days fly by quickly when you are immersed in the excitement of building your new business. Stay on top of the dates. Know the length of your APR period and when it ends. Make it a goal to pay off your credit card debt within that period so you can avoid interest payments.
- Minimum payment. Remember, you must make your minimum payment each month. If not, you may be subject to penalty fees and could even lose your promotional APR period.
Quick access to financing.
It doesn't take long to fill out a credit card application. Raising seed money from investors or crowdfunding sources takes time. A business credit card can provide the capital injection you need and creates a standing credit line as expenses emerge. It can be a valuable tool to get your business up and running.
If you are ready to launch your business these cards essentially give you a long interest free loan.
If you are ready to launch your business these cards essentially give you a long interest free loan. Many of us have the urge to ditch the 9-5 job and be our own boss. Are you ready to get started now?
Our Editor's Picks
There are several business credit cards that come with 0% intro APR. This may be the easiest and fastest way to fund a new business.
- Chase Ink Business CashSM Credit Card offers zero percent intro APR on purchases for 12 months.
- The Blue Business℠ Plus Credit Card from American Express currently offers an intro APR of 0% for 15 Months on purchases and balance transfers. After that a low ongoing rate of 12.24% - 20.24% Variable.
- Capital One® Spark® Miles Select for Business is another solid choice with an APR of 0% on purchases for 9 months.