When Your Publicity Campaign Requires an Assistant
Credit Cards for Small Business
by Assistant on January 21, 2010
When just starting out, it's not uncommon for businesses to be torn on the subject of credit – undeniably, a credit card is another risk to take on, a risk that can turn sour quickly, and has done so in the past for many businesses. In truth, however, for most small businesses a credit card is a risk well worth taking. The fact is, getting a credit card is often the responsible thing to do. It will be essential to the growth and success of your business.
Here are a few of the reasons why –
Business Finance Records. It is almost always a good idea to keep your business life separate from your home life. It is even more important in regard to finances, personal and business. Once you mingle the two, it will be very difficult to take care of your business’s financial records – which would not only be hurtful to accounting and managing expenses, but also to paying taxes. We all know how harmful a lack of records can be if your business is ever audited by the Internal Revenue Service (IRS)!
Enter the small business credit card: equipped with a credit card dedicated only to your small business, on the other hand, there will be no problem maintaining neat records – your credit card statement will handle that. Since credit card records are available online, it is also easier to input records into an accounting or tax software, such as Quicken or Microsoft Excel. For IRS purposes, these records will provide certifiable proof of itemized deductions you have stated on your filing.
Build Credit and Rewards for Later. At some point in time, if not already, your small business will need funding outside of its cashflow, most likely in the form of a loan. If that loan is to be provided, the business must have good credit behind its name. Fortunately or unfortunately (depending on how you look at it), good credit only comes with time: by proving to credit bureaus that you are worthy to be trusted with someone else’s money. As soon as a credit card is obtained in the business’s name, the credit reputation immediately begins to accumulate, as simple as that.
Much later, the business will be able to qualify for credit lines or loans if they become necessary. Additionally, a number of merchants offer discounts and rewards to businesses, provided that business-status can be confirmed. Most merchants accept a credit card displaying the business’s name as verification for these rewards.
Manage Spending. Similar to other credit cards, limits can be instatedon a small business credit card; this way, there will be no problems of overspending your expense account. Once you have obtained a line of credit in your business’s name, employees can also be given consent to make purchases. What is especially advantageous is that personal cards can be distributed (per employee), each with their own limits. Therefore, owners can both regulate and monitor what employees are doing with the business’s funds.
How to be responsible with a credit card?At the end of the day, getting (and using) a credit card as a small business is a wise thing to do, although by nature it is also very risky. As some would say, it is a risk worth taking. Nevertheless, to ensure that the benefits do indeed outbalance the risks, there are a few things to remember when dealing with a small business credit card:
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