Creative Short Term Financing

Paying bills is no fun. Juggling costs for a start up business is not picnic either. If you are starting out on a shoe string, you know that it can be a challenge to pay everything on time. Again being organized is key. I do some key planning on the white board before starting the business. This can help in the lean months.

Set up a company bank account
Set up a company credit card linked to the bank account
Set up a credit line linked to the bank account.

Pick a bank you like and set up a separate account that has nothing to do with your home account. Most banks will be more than happy to set up the credit card at the same time as well as the line of credit if you qualify. I always try to pick a credit card that has some bonus point’s perks. Today’s marketplace is competitive. If the economy is slow, banks need to come up with ways to bring in more business.

The perks are for you. Use the card for all of your expenses and build up some points. Put every expense that relates to your business on it and watch it add up. You might as well enjoy an extra gift card or airline miles if it is available. Many of the awards are useful for your business such as gift cards to Office Depot or Staples. You can use these cards to save money on the things you need for the business anyway, or you can treat yourself for being smart.

Sometimes things come up in business that you did not plan. Occasionally you will be strapped for cash and you can use your card to take up the slack. It used to be considered evil to use a credit card to start a business or finance parts of a business. However times are changing and the use of the card in a responsible way is more accepted and encouraged.

Using line of credits in some instances is gaining more credibility as well. One of the main advantages of this and the credit card route is that you can do it on your own schedule. Banks are notorious for not giving loans to new businesses. That can make it very hard to get your business going. If you are responsible and can manage budgeting the card payments, this can give you some needed flexibility. A year or two later you have a track record as a business and you will be much more likely to get a loan.

Technorati Profile

Share and Enjoy: