(Submitted by Brad Bapst, Director, Small Business Development Center, OSU South Centers)
Whether you run a small business, lead a large corporation, or work as a self-employed freelancer, you will probably experience cash flow issues from time to time. Sometimes this can happen when you’re waiting on various payments from your customers, and other times it is simply the result of having to purchase equipment or supplies when money is tight.
This is where business cards can really come in handy. Here are a few examples of when having a business card could solve a cash flow problem instantly:
Real Life Example #1
A self-employed freelancer is waiting on several large payments from various clients, but they don’t expect to receive those funds until the end of the month. In the meantime, they need to purchase essential office and computer equipment from an office supply store. A business credit card would allow them to charge their equipment purchases temporarily until they received payment from their customers later in the month. Further, a card like the Ink Plus® Business Credit Card would even reward them with 5% cash back on their purchases.
Real Life Example #2
A small business owner with ten employees just finished a huge project for a client that they have yet to be paid for. Unfortunately, payroll is coming up, and they don’t have enough funds to keep operations running and pay their employees. If necessary, they could cover many of their business-related expenses with a business card for a limited time so they could pay their employees. Once they received payment from their client, they could pay their balance in full and “catch up.”
Real Life Example #3
A large business needs to purchase $50,000 worth of equipment that they will need to pay off over several months. Instead of taking out a loan, the business could leverage the credit line on their business credit card instead. While they would need to pay interest in this case, they could write it off as a business expense.
Source: Simple Dollar Website Excerpt taken from the updated on 1-19-2016 The Best Business Credit Cards of 2016 article by Michael Gardon.