Is A Business Credit Card Right For You?

There are a number of ways in which a business can borrow money on a short-term basis such as by way of factoring, invoice discounting and an overdraft facility but there is also the option of using a business credit card.

There are so many different providers of business credit cards so you may wish to shop around to find the one that meets your requirements and provides a competitive deal. Yes, you can approach your own bank but you may also wish to compare what it is offering with that of the other clearing banks, building societies and other specialist providers of such cards.

Potentially, a business credit card can be used to buy the likes of stock but without having to pay any interest on the amount that the business has borrowed. So, how can this be achieved? Well, you will need to check with the business credit card provider but some may offer a period of up to say 56 days interest free credit. Depending upon when you buy the stock and when your business credit card statements are produced may enable you to get a period of interest free credit. Therefore, you could use this to your advantage and ensure that if you pay off the amount borrowed for these stock purchases by the “due date’ you may not be charged any interest. If you had used your bank business overdraft facility to make these purchases you would have been charged interest on the amount borrowed.

Check the terms and conditions of the business credit card provider but you may be able to get an interest free period on cash advances.

A word of caution – a business credit card should not be used as a form of long term borrowing as the interest rate charged by the card provider is likely to be higher than if you were to borrow the money by way of say a business loan or a commercial mortgage.

With so many ways for a business to borrow money you may wish to get some advice as to what is the most suitable option for you. In this respect, why not contact us here at Commercial Mortgage Link and we will put you in touch with an experienced mortgage broker who may be able to provide suitable advice. We look forward to hearing from you.

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