As a small business owner you must surely be receiving plenty of promotional offers and applications intended for small business credit cards.
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When such presents are flowing, it’s only regular to be confused whether to choose business loan cards or to opt for options like small business loans as well as other fixed credit lines. While it cannot be denied that business credit cards are of big help to new and old companies alike, they also come with their own share of responsibilities to be fulfilled. They have to be managed wisely. Here are some advantages and disadvantages of small business/trade loan cards that will help you make a decision.
A little About Small company Credit Cards
Small trade/business credit cards allow you to to gain access to funds in the easiest manner. It’s a revolving line of credit along with a fixed credit limit. Whether you want to pull away cash or just make purchases directly through small business loan cards, the process will be quick and simple. However , if you do not make the transaction on time, you will attract high attention and even late fee.
Advantages of Business Credit Cards
Qualifying is Quite Simple
Are you refused a loan because you don’t have an established credit history? Do not worry; you could be eligible for a small business loan cards with ease as long as you fulfill their minimum requirements that are quite flexible.
More Convenient at Times of Need
Credit or loan cards are known to be one of the simplest ways of accessing cash in times of need as you can associated with payment directly or even through on the web. You can also withdraw the cash and associated with payment, no matter what your purpose can be.
Helps Building Business Credit
Once you know how to use a credit card with caution by paying the interest on time and not going above the spending limit allotted for you personally, then you can raise your business loan scores with the help of credit cards.
Financial Cushion much more Difficulty
In case you are going through a rough patch in your business and are in need of some immediate cash, credit cards could be of great utility. Whereas business loans along with other options will take time to materialize.
Drawbacks of Small Business Credit Cards
· Large Maintenance Option
Although the advantages of company or trade credits are many, you need to pay a price to enjoy them. You have to pay a high rate of interest for using credit slips or cards in comparison with loans and other fixed line of credit. In case you fail in making a payment or delay it, you will have to incur late fee and penalty. Also if you are a defaulter, you will have liability issues and will be barred from borrowing money any further.
· Security Troubles
Your own card information could be easily stolen by your employees, vendors or even customers. Also you need to be very cautious about who you are authorizing to handle your small business credit cards.