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Funding a start-up with credit

Motiv8meMotiv8me subscriber Posts: 1 Member
edited December 2015 in Startup Funding
I keep running into road blocks with the bank and I'm thinking about using business credit cards. Is this a good idea?


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    bizcapmartbizcapmart subscriber Posts: 0
    Hi Motive8, many people do it this way. The caveat of course is that after the introductory period of low interest, the credit card rates spike. The best suggestion is to limit your exposure to the high rates by as much as possible.
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    fundinghelpfundinghelp subscriber Posts: 1 Member
    Assuming you know to limit yourself to high rates, u should know this.

    1. Its money, if your idea has value - heck yea use it.
    2. Whatever one can obtain in "business credit" you can get 2-2.5x that in personal credit
    3. All "biz" credit (for people with new businesses like you) still rely on a personal guarantee. And to be honest, by the time most people get funds based solely on the biz with no PG, you don't need money.
    4. The major and only benefit to biz credit is that as long as you are making your payments, most will not report your the debt on your personal side, helping your DTI and credit utilization stay low. If you default, it will be on you personally.
    5. If you want lower rates, think about personal. I have cards that I cash out for no fees whatsoever, then I pay those off with 0% for 12-20 months. Net result is less than 5% unsecured money. after the 0% is up, you will good rates are 12-24%, but dont ever pay them. I have been chasing 0%'s for years now.

    6. I look at a lot of start-ups and a lot of deals. If your deal works at 5% and doesn't at 20%, you have a bad deal. (unless your goals involve a passion for something outside of making money)

    Hope this helps.
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    Gregory101Gregory101 subscriber Posts: 51 Bronze Level Member
    It all depends on your goal.

    Are you trying to avoid surrendering equity?
    Will you be "personally guaranteeing the credit line?"
    Do you plan to use the funds to finance productive profitable transactions?
    How do you plan to pay your indebtedness?
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    MWCCMWCC subscriber Posts: 6 Member
    edited October 2017
    HI Motiv8me, It's actually a great way to start funding your business because:

    1) You can get 0% interest rates for 12 months+ and if managed properly you get these things called balance transfer checks that you can continue that 0% interest rate for an extended 12 months and so on

    2) they don't report to personal credit bureaus and you're actually building report and relationships with business bureaus

    3) they come with much higher limits than personal credit cards and you can get those limits significantly increased every 6 months.

    I actually know some great lenders that can at the least get you a funding estimate as long as you have right around a 700 credit score or higher.
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