Never Use Your Credit Card for Funding Your Business

There is no sin except stupidity.

-Oscar Wilde-

SBA Low doc, microloan, and 7(a) loans are all good sources of start-up funds. The Small Business Administration's Web site (www.sbaonline.sba.gov) is the best place to start, as it will give you a great overview of the SBA loan programs. Your next step is to visit the list of certified and preferred lenders. You want the preferred lenders (they are more small business friendly, as a rule, than other banks).

Credit cards, given the historically low rates and the ludicrous offers to switch all of your debt to a new card, make attractive alternative financing sources. This can become a very expensive form of debt if you aren't careful. A 2 percent discount for money you repay in 30 days works out to 24 percent a year. Scarcely a bargain, and if you don't repay it in time you'll be looking at anywhere from 9 to 22 percent on the unpaid balance – and that's in addition to the original discount. No wonder the credit card companies can afford to be generous in their offers.