I never advocate that anyone borrow just to borrow. But if you need to flip houses, make payroll, invest in something that you know will reap a short-term profit, then you need access to capital. In the past few years, even when money has been tight, there have always been options. Banks always need to lend to stay in business. You just need to know where to look.
Never say never
When people say things like, "Never…amass credit card debt, " they mean well. They may have had a bad personal experience. But if you can get better terms on a credit card than on a bank loan or a mortgage, than heck yeah you should amass credit card debt. If you borrow on a credit card and make more money than what you pay in interest, then let's do that all day long!
If you are an entrepreneur or a small business owner, smart credit card borrowing is one way to fund your operations or get your business off the ground. An advantage with using credit cards is that it removes the need to get costly funding from investors. It's also one of the easiest, and, if done correctly, least expensive ways to get financing. In fact, among all loan products, credit cards had the greatest easing of underwriting standards. I know this flies in the face of everything we've ever been told. Sure, many credit card companies still charge near usurious interest rates, and most of us would be hard-pressed to make good use of capital at 20% and higher interest. But guess what. There are thousands of credit card offers at favorable rates for small businesses.
Sometimes Things Too Good to Be True Are, in Fact, True
So, you've gotten another 0% interest credit card offer in the mail. You toss it, thinking "It's a trap. Add in those hidden fees and crazy post-promotional-period interest rates and I'll be giving them my house and car in 12 months." But many of these offers are bonafide, great deals! And if you can benefit from access to financing, you should jump on these.
"But how does that even make sense for the bank?" you might ask. Excellent question. The thing is, if banks don't lend money, they don't make money. Banks themselves can borrow at historic lows (they borrow at near zero percent from the Federal Reserve!), so they have access to lots of capital. Add this to the notion that banks have a lot of ways to make money, and you can start to see how this makes sense.
Banks want to have a relationship with you – and if they already have a relationship with you, they want to surround you with services that will keep you from going to the competition. So, providing you with great credit card offers costs them very little, and allows them to start shoving other promotions into your mailbox.
Moreover, although many zero percent interest terms appear to be capped, I am here to tell you unequivocally that if you know what you're doing, that's just not the case. Banks hope you're not savvy enough to realize that if you know who to talk to and what to say, you can keep rolling over zero interest introductory offers for the foreseeable future. Business owners are the "crème de la crème" in the banking community and can take advantage of special promotional codes and techniques that aren't available to the regular borrower.
Get Some…and Put it to Work
If you're wondering, "How can I get 0 interest credit cards," here are some things you can do to take advantage of low- and zero-interest credit cards for your business:
- If you don't have a business entity already, get one. It's easy to acquire and anyone can do it. You want to be smart about it, as some entities are far more lendable than others. For example, having Marketing/Advertising or Business Management in your business name, indicates you are (on average) a better risk than someone with Real Estate in their title. There are also important nuances in terms of what type of entity you set up.
- Know how to elucidate what your business does. If you're stuttering, stammering or seem unsure of your business, don't expect the bank to lend to you.
- If you have personal credit issues, get them cleaned up. There are many agencies that can assist you.
- Search the web for credit card offers for businesses.
- Do your homework to sort through various offers, identifying any hidden fees.
- Explore existing relationships and see what they're willing to do. I once went to my bank to open up a checking account and was offered a $17,000 credit card for being a loyal customer.
- Consider requesting line increases or exploring promotional rates for those cards that you already have. Many banks won't hesitate to reward good customers with increased credit lines.
- If you're looking for zero and low interest business credit cards and credit lines, take a look at the 7 Seeds/Fund and Grow program, which has raised millions in funding for small businesses nationwide, with the average amount ranging from between $50,000 and $250,000.
- Think about how you would use the money to make money.