Credit Card

This is a form of financing which gives a self-managed small business access to a line of credit up to a prescribed limit without restriction on the use of funds.

It is unsecured and is granted without the requirement for formal financial statements or business plans.

Credit Card lines of credit are extended based on the personal credit worthiness of the owner.

Advantages

• No collateral is required.
• No financial statements or business plans.
• Provides access to cash via automated teller machine network.
• Flexible repayment options, i.e. monthly minimum or the entire balance.
• No transaction fees on purchases.
• Descriptive billing statements.

Disadvantages

• Cost of borrowing may be higher than under a formalized operating line of credit.