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The Risk of Credit Cards

This week, we are going to discuss the risks of using credit cards to fund your inventory and give an alternative funding option for your business. 

Casey Carroll
30 Jul

Credit cards are risky. 

They are so appealing to use because money doesn’t immediately leave your account. It gives the illusion that you have more money to spend than you actually do. When you don’t see it, you tend not to think about it. However, credit card charges can add up quickly and can negatively impact your business. 

This week, we are going to discuss the risks of using credit cards to fund your inventory and give an alternative funding option for your business. 

Why are credit cards bad for business?

First and foremost, you’re unlikely to have access to capital that is in line with your inventory needs. Sometimes, even when you max out a credit card, you are still in need of money. This can lead to the decision to use multiple credit cards, which creates an even larger problem. It can be hard to tell what purchases will be the most important at the time, forcing you to make multiple credit card charges a month. 

Additionally, interest can be a killer if you can’t pay it back quickly. If you don’t have the money when you make a purchase, it is likely you won’t have it later on. Not being able to pay your credit card bill will incur fees and lead to more debt for you and your business. This can dig you into a hole you can’t get out of. 

Finally, you could hurt your personal credit score if you pile on a lot of debt. If you are late with or don’t make your payments, you will be hurting your credit score. Even if you have a small business credit card, these credit cards require a personal guarantee. This means that you will be harmed from your business’ purposes and your personal credit will be tied to your business's ability to repay its debt.

So, what is the solution?

Forever 8 can be! We here at Forever 8 provide a transparent capital source that gives e-commerce sellers access to capital to fund their growth. Forever 8 is a long-term capital partner, funding 100% of your inventory needs, including any re-orders. We determine eligibility by looking at historical sales and projections, meaning that your personal credit isn’t factored into our decision. Forever 8 takes on product risk and never takes an equity stake in your business, which means that you control your business and maintain your upside. We are a true partner that accelerates your growth by funding 100% of demand, allowing you to scale with your demand and never face out-of-stock events or inventory funding constraints.

We hope that this blog was helpful and that you are aware of the risks credit cards can have on yourself and your business. 

Until next time, let us know if you have any questions or comments below!

Casey Carroll
30 Jul

Pay Back as You Sell

Forever 8 recoups  our investment (plus a small fee) as you sell. Take longer to sell than anticipated? No problem, we will work with you to ensure that we are both in alignment. Sell faster than anticipated? Great, our fees will be lower and we can order you more inventory to keep pace with your demand.

Long Term Capital

We are a partner. We aren’t here to offer quick bridge loans. Instead, we work together for at least a year, funding 100% of your inventory needs.

Reduce Your Exposure

Forever 8 does not require a personal guarantee. We act as a partner, and we take product risk. Our interests are mutually aligned

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