The primary motive concerning any business is to earn maximum profit. Sure, it is anticipated that further monies will bail out the financial institutions (this time with very strict accountability and transparency rules, especially as to executive compensation, bonuses, and golden parachutes-under the Recovery Accountability and Transparency Board), but what they really need is a new secondary market or stimulus to our existing one.
A survey done during the financial year 2007-08 by the National Small Business Association of the United States of America, has reported that 44% of small business owners use credit cards for meeting their daily needs, exceeding any other source of funding.
Also, you should also consider your repayment capacity and not opt for loans which you think will be difficult to pay later on. Loans should be taken only when you need them the most and not just because your lender is approaching you with attractive offers.
If you are running a business or have recently started a small business set up, it is advisable to get as much credit as possible on your credit cards – but do this at a reasonable rate, because getting too much credit will surely make your credit score fall.
Purchase order funders will not put cash in the hands of the new business owner, but will pay the suppliers directly and then when the finished product has been sold to the customer, the factoring company will collect the payment from the customer directly to satisfy the funds advanced to suppliers to produce the product.