16 Dec Business Credit Card vs. Small Business Loan – Which is Right for Your Business?
The decision of whether to get a business credit card or a small business loan used to be more straightforward. Getting a loan from a bank often meant jumping through hoops, and the application process could take weeks, possibly even months. As such, a small business loan was really only considered if you had a large project in mind. A business credit card, on the other hand, provided flexibility. Offering instant access to credit, the approval process was comparatively quick and the card easy to use.
Traditionally, businesses would try to get a loan for major projects and use a business credit card for day-to-day expenses and working capital. But the situation has changed. Alternative lenders, like QuickBridge, can process a loan application in hours and deliver funding in just 24 hours. A small-scale, short-term loan from an alternative lender is simple, quick, and comes with a pre-determined repayment schedule. This makes the debt manageable and controllable.
As business lending has evolved, some of the downsides of business credit cards have become more apparent. The debt can rack up quickly if you can’t pay it off completely. Relying too much on a business credit card can also leave you with debt that feels unmanageable and keeps growing as interest stacks up.
All of this doesn’t make business credit cards a bad option. It simply shifts the conversation. There are still many instances when a credit card can be helpful, but loans are valuable in a much wider set of circumstances than they once were. Learn more in our infographic below, where we dive further into the best uses of each. For more information on whether a small business loan is right for you, visit our website.