As a small business owner, you sometimes need to invest in your business to remain competitive. Technology is becoming such a big part of operations for many companies, but these solutions are often expensive – more than can be covered by typical revenue. You might be tempted to use credit cards to fund big software projects, but think twice before doing so. There are a few things you’ll want to know before you whip out the charge card.


Business Credit Card Debt

Interest rates are usually sky high. When compared to other types of business loans, credit cards carry extremely high interest rates. Plus, these rates can increase over time or if you’re late on making monthly payments. Like any business, banks need to make money to survive and they’ll take advantage of small business owners trying to turn a profit.

Making minimum monthly payments creates problems. Once you charge with a credit card, you’ll be responsible for a minimum monthly payment. With other business expenses, you’ll probably be tempted to pay the lowest amount possible rather than zeroing out the balance entirely. This means you could be looking at several years to pay off the business credit card debt for software that may be outdated by that time.

Revenue can be unpredictable. As much as you try to forecast earnings, you may not make as much revenue in a certain time period as you expected. Tough times make no difference to banks: They’ll still expect regular payments on your credit card account.

You may be sued by the credit card company for non-payment. If your business credit card debt remains unpaid for an extended time, the company may initiate a lawsuit against you or your business to recover the balance due. You stand to lose everything you’ve built for your business, and it may affect both your credit rating and your company’s.


Better Options: There are other ways to fund a project besides incurring business credit card debt.

  • Small Business Administration Loan: The SBA has established a program specifically for small business owners looking to start up or expand a company. The terms of the loan are designated by the lender you use, but the funds are guaranteed by the SBA in the event of default. You can borrow up to $5 million under the basic 7(a) General Small Business Loan.
  • Investors: There are plenty of people out there looking to invest funds in businesses they think have a great product or idea. You might consider approaching “angel” investors to help fund a project you can’t afford without some assistance.


 Small Business Debt Relief Attorney In San Diego

It’s easy to get in over your head with financing a big software purchase or any other project that you’ve  paid for with credit cards – and it’s difficult to get out of credit trouble when you do. Trying to work with credit card companies is challenging, especially when they’re harassing you or threatening to sue. There are experts to assist you with your situation, so consult with a small business debt relief attorney in San Diego to talk about your options.

Daniel R. Gamez, an attorney focusing exclusively in debt settlement, is licensed to practice in all state and federal courts in California and Texas. Mr. Gamez owns and operates the Gamez Law Firm in La Jolla, CA. For more information, please contact Daniel Gamez at 858-217-5051, or visit