Eric had option to ask friends and family for funding his business, but he wanted to be more independent in terms of borrowing money and of course he didn’t want to share profits on investment. So, the fastest and more reliable way for funding his business was credit card.
But wait, before following Eric, you must make sure if credit card funding is right for you or not. So, let’s see when credit card funding is the right option and when not.
1- Beware of the fact that using credit cards as a main form of financing is very risky. In case of business failure you may have to face the debt alone.
2- Credit card funding is fastest as well as cheaper than small business loan, so when you have to choose between the two, credit card is the best option.
3- If you are working on a product that needs more than six months to be available in the market, credit card funding is probably not the right option.
4- For entrepreneurs who start with a part time business and then turn it into full time, credit card funding is probably the best option.
5- Credit card funding is the convenient option, but be very much careful to take it when it is the only option.
Considering the points above allows you to avoid uncertainties with your startup funding. But you may take risk as well, depending on your situation and the backup plan you have.