A brilliant business idea such as yours doesn’t come around twice in a lifetime; still, you are incredibly lucky that no one else has yet thought of your magnificent concept for a startup.

No matter what, you have to move fast, setting up your trademark and developing your brand — but before you can do anything for your fantastic new business, you need money. And the fastest way to get money is from credit cards.

Credit cards are among the most popular sources of financing for startups — but they offer many pros and cons that entrepreneurs should be aware of before they start building capital. Here’s a quick rundown of using credit cards to fund small businesses.

Personal guarantees and incorporation

It is important to note that the biggest downside to funding your business with credit cards is also the biggest downside of funding your business with any type of loan.

An overwhelming number of businesses in the United States are so-called sole proprietorships, which means a single person owns the entire venture. Thus, to lenders, the line between a business line of credit and a personal line of credit — especially at the outset — is fuzzy at best.

Until your business becomes incorporated (which we will discuss later), you are the only guarantor of your business’s debts. Thus, almost any credit card you take out for your business will have a personal guarantee, which means your personal assets will be at stake if your business goes under.

For what it’s worth, this is also true of partnerships, but with an unfortunate twist: Each business partner is responsible for 100 percent of the business’s debts, which means if your partner is utterly broke, you have to pay all of what your business owes — even if you split the initial costs down the middle. While this situation is uncommon, it is entirely possible, so you must choose your debts (and your potential partners) wisely.

Many business owners incorporate their venture right away under the assumption that it will automatically protect their personal assets. Indeed, incorporating will protect some business owners from liability — since incorporated businesses are granted most of the legal rights of individuals — but it is certainly not an impenetrable shield, especially at the start.

If you are one of only a few employees in your “corporation,” there is a very good chance that you would be personally sued in addition to any suits against your business. Fortunately, with incorporation, you would no longer be responsible for the credit card debt your enterprise needs to succeed, and you could purchase liability insurance to cover any gaps where your personal assets are exposed for the taking.

Benefits of business credit cards

Still, there are quite a few reasons using credit to fund your startup is a brilliant idea. Most entrepreneurs are already quite familiar with credit cards, from the application process to their use.

Obtaining a business credit card isn’t a grueling, exasperating process — especially, when you use online comparison tools to help you shop — which means your startup can have some funding almost right away.

Most business-specific cards provide exciting rewards that help small businesses grow, like cash back and travel miles earned from office supply stores and Internet payments. Credit cards, when used properly and paid off at bill time, can help owners and businesses build their credit scores, which will improve their chances of getting better funding in the future, should they need it.

Additionally, using a credit card for everyday expenses makes accounting significantly easier, as it takes less time to consult a single card statement than to consolidate various forms of financial reports.

There are dozens of reasons so many startups are turning to credit cards for funding, and despite the fear, very few become bogged down in credit card debt, if they are responsible. As long as you know the risks and relish the rewards, credit cards are likely the best funding option for you.

3 steps to success

If you are eager to begin your startup and have your business card in-hand, here are three things you should know before you start racking up charges:

1. Have a plan. Before you start making purchases, you should know what you need, how much it costs, and how quickly you are going to pay it back. Your plan should be specific, with real numbers.

2. Be close-fisted. You definitely don’t want to overspend on credit cards. You should cut your needs down to the bare minimum; work from home for as long as possible, run your own website, etc.

3. Seek out other funding options. After a while, credit cards won’t be enough to keep your business running. You will need more funding for expansion, and for that, you should turn to more reliable (and less risky) sources.

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