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Does A Home-Based Business Really Need Credit?

Updated: Feb 3, 2022

I guess the real question I should ask is "Are you planning to always be a small home-based business?" Or... "Do you plan on carrying your business debt on your personal credit forever?" Or, better yet... "Wouldn't it be nice to have access to funding for operations, growth, or investment?" In their lean early days, very few small business owners imagine that their tiny self-funded companies would someday become a household name, but multi-billion dollar businesses like Amazon, Apple, Disney, Google, HP, Harley Davidson, Mattel, Microsoft., Dell, and Nike all started out as small home-based businesses with nothing more than a good idea, a handful of cash, and an unrelenting desire to make it a reality.

In his 2014 column for, 6 $25 Billion Companies That Started in a Garage, Drew Hendricks explains that success truly depends on determination, faith, and hard work. "No matter where you start your business or how much money you originally put into it," he writes, "passion, commitment, and courage are often all you need to make your company a success." But that's not necessarily all you'll need... What Hendricks doesn't address in his post is that small home-based businesses are rarely bolstered to success with an unencumbered budget or unlimited access to cash. The money has to come from somewhere for parts, supplies, equipment, marketing, and labor. Unless you already have access to funding, you are likely going to need credit to boost your business into the mainstream. But good business credit impacts more than just funding. It also means better insurance rates, lower credit card interest, access to merchant services, stronger financial scores, validity in the marketplace, and more contract opportunities. A lot rides on your small business being successful, and being successful rides on solid credit scores and ratings. Credit can come in a variety of forms. While the first thing most people think of may be credit cards or unsecured bank lines of credit, most businesses don't usually get to that point without first having access to trade-lines or retail credit accounts for the products or services they need to get their business functioning on a day to day basis. Home-based operations may not have the same massive expenditures as a well-established conglomerate, such as huge office spaces, thousands of staff, millions in equipment, and billions in inventory, but you still have bills to pay and purchases to make that go beyond the products or services you offer to your customers. You may need a new computer or printer that is just for business use. Perhaps you need a separate phone line, or special software, or specialty tools, or parts and supplies. While you may or may not choose to have a company sign bolted to the exterior of your home or garage, you might like to have a sign on your car, or marketing materials, business cards, and office supplies. If you're like most small business owners, you may dream of building your home-based business to the point where you can expand, hire more staff, move into a storefront location, and be "the boss" rather than the "laborer", but you probably won't get there without burning the candle into the wee hours of the night, fretting over a tight budget, and making sacrifices. You can lessen some of those worries if you have ready access to credit that allows you options. If you have been thinking about building or boosting your business credit, CLICK HERE for more information, or HERE to book an appointment online for a one-on-one business credit consultation.

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