SBA Loan or Credit Card?

A few years ago, I started my own small business.  To say I know nothing about starting my own business would be kind.  I already had a checking, savings, and credit card with my current bank.  I figured the easiest thing to do would be to open another account, a business account and get another platinum credit card.  So rather than take the time to fill out the necessary paperwork for SBA Loans, I simply got a credit card.  Huge mistake.

Starting your own business give you the freedom to do what you want to do.  You are your own boss, so you make the decisions.  I also love the feeling of accomplishment in starting my own business.  The problem is that no matter how creative the idea, you have to have some business knowledge.  None of which did I have.

With a credit card that had a $10,000 limit, I felt perfectly free to get things rolling.  I charged the cost for the creation and the manufacturing of the product we were going to sell.  I wanted inventory to sell.  We needed to be able to take credit cards, so I charge the fees to set us up with a credit card handling company.  We needed a website and a domain name.  We needed to copyright our logo and name.  The list could go on and on.  The problem turned out that I was putting all of this on a credit card with a not so favorable interest rate.

I also believe that if I would have taken out a SBA Loan and put the cash into a checking account, I would not have spent so freely.  There is just something about a credit card that makes it feel like you are not really spending.  Needless to say, we are still trying to pay off over $8000 in debt with a great deal of this amount being interest.  Lesson learned.

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