Whether you are planning to start your own business or purchase a franchise, you will have to make a lot of decisions on how you will operate. One of the key decisions you will have to make is how you finance it.
As a new business fresh out of the oven, it will be tough for you to get the funding needed. As many traditional credit options go out of reach, new and innovative financial instruments like business credit cards are your best option.
A business credit card can be more than just an easy way for businesses to pay for purchases. It can help you smoothen out your cash flows, protect yourself from fraud, and give lucrative business-specific rewards.
However, you must be intelligent and innovative about using a business credit card. Here are some of the smart ways you can use one for your startup:
Fund your business
Not every new business needs a lump sum of cash to launch and run its operations. In such cases, you can finance your business with a combination of current income, savings and funds from a business credit card.
As most business credit cards depend on the owner’s personal credit score and also on business financials when assessing an application, they can offer a great financing opportunity for such businesses that are generally underserved by traditional banks and financial institutions.
Build a credit score
While this may be one of the most repeated benefits of a business credit card, it can be highly beneficial for you to build your business credit score. Even if you already have a solid personal credit score, you have to establish a credit score for your startup to get access to funding in the long run.
As you use the business credit card to make purchases and then pay the balance regularly every month, you establish and improve your business credit score, which will then help you when applying for a loan.
Consolidate funding sources
Since credit utilization is a key factor in ensuring a higher credit score, you will have to be very careful of how much credit you have. While having multiple business credit cards can extend your available credit, it can also put your business at risk if you cannot pay the combined balance on time.
At such a time, you can use a business credit card to consolidate your debts by making a balance transfer, as it comes with an interest-free credit period that can help you pay your debts faster.
As a startup owner, your funding options are highly limited. You may have your savings, some investment from your friends or even a startup loan. Adding a business credit card to this mix can give you an extra layer of financial flexibility. Looking for a business credit cardin India? Consider founderscard.
founderscard is the best business credit card that provides the best-in-line credit limit for your startup, with up to 51 days of interest-free credit period. It provides 3x reward points with startup & SME-specific rewards that can easily be redeemed from the mobile app.
Interested in getting the best business credit card in India to fund your startup? Visit founderscard.in today to get started.